The Roosevelt Rundown is an email series featuring the Roosevelt Institute’s top 5 stories of the week.
1. Corporations Are Splurging on Stock Buybacks
In a joint report with the National Employment Law Project (NELP), Roosevelt Program Director Katy Milani and NELP Senior Researcher Irene Tung expose the extent of stock buyback spending across the U.S. economy, highlighting three low-wage industries: restaurant, retail, and food manufacturing. The findings are jarring. McDonald’s, for instance, could pay all of its 1.9 million workers worldwide almost $4,000 more a year if the company ended its buybacks program and redirected the cash to worker compensation. (40 percent of fast food workers live in poverty.) This practice serves corporate executives, but it extracts from the resources companies need to invest in workers and long-term, shared economic growth. Read the release.
2. Roosevelt’s #BuybackScam Report Makes Waves
The magnitude of the Roosevelt Institute and NELP’s findings this week generated widespread press coverage. Tuesday’s release of Curbing Stock Buybacks: A Crucial Step to Raising Worker Pay and Reducing Inequality garnered an exclusive with Annie Lowrey at The Atlantic. “Stock buybacks are eating the world,” she writes. The report also informed an explainer by Vox’s Emily Stewart, an article in ThinkProgress, and a piece in Forbes—to name a few. For The Week, national correspondent Ryan Cooper calls for a ban on stock buybacks: “We need big, aggressive moves to club down corporate profits, and start directing that money back into the country as a whole.”
3. Public Benefit, Incorporated
Companies today no longer advance the public interest. For Boston Review, Roosevelt Senior Economist and Policy Counsel Lenore Palladino argues for rewriting the rules of Corporate America and changing who runs—and owns—corporations to better ensure shared prosperity. “Today’s corporations have retained their privileges and lost their public purpose,” she writes. “Corporate power should not trump people power.” Roosevelt President and CEO Felicia Wong responded to the article on Twitter: “For a path towards real worker power and a view of what corporations could look like if they worked for all of us, this is a must-read.”
4. Long-Term Trends Matter
Last week, President Donald Trump celebrated GDP growth, touting it as “historic.” While taking credit for what is the strongest pace of growth since 2014, ThinkProgress reporter Casey Quinlan says that Trump is missing the big picture—with Roosevelt Vice President of Research and Policy Nell Abernathy explaining why GDP growth doesn’t say much about the real economy. “There is not much to celebrate unless that growth is translating into higher wages for average Americans or more investment in the activities that grow our economy for the long term,” she said. Abernathy also joined the team at Cheddar, emphasizing why GDP numbers don’t tell the whole story.
5. The Politics of Health Care
Senator Marco Rubio (R-FL) introduced a paid family leave bill this week, which allows parents to borrow from their Social Security retirement benefits to take leave. For Slate, Roosevelt Fellow Andrea Flynn said that the proposal would “force women to choose between leave and retirement security.” Facing gender discrimination in the labor market, and in our economy and society more broadly, women—who have an average of $3,000 less in benefits to draw from than men—are at a disadvantage under this plan. Roosevelt Editor Kendra Bozarth pointed to Trump’s tax law: “While the rest of the developed world guarantees these benefits, the US (including Sen. Rubio) *chooses* tax cuts for the ultra rich instead.”
What We’re Reading
In The Guardian, professor and political commentator Robert Reich explains why nearly 80 percent of workers in the U.S. live paycheck to paycheck. “America doesn’t have a jobs crisis. It has a ‘good jobs’ crisis—where too much employment is insecure, and poorly paid,” he says. His op-ed includes a jaw-dropping chart, which shows that as union representation dropped nationwide, the share of income held by the top 10 percent skyrocketed.