How Stock Buybacks Hurt Workers

September 10, 2021

Curb buybacks. Boost wages and innovation.

The Roosevelt Rundown features our top stories of the week.

A Tax on Buybacks

Stock buybacks are back on the rise—continuing a trend supercharged by the 2017 Trump tax cuts.

Now, amid ongoing budget reconciliation negotiations, Senate Democrats are proposing a 2 percent tax on corporations that engage in the practice.

As Roosevelt Fellow Lenore Palladino has argued, buybacks manipulate stock prices, enrich corporate executives and shareholders at the expense of workers and taxpayers, and stifle innovation.

“Stock buybacks are one of the drivers of our imbalanced economy, in which corporate profits and shareholder payments skyrocket while wages for typical workers stay flat,” she told the New York Times this week.

“That just means that the wealth created by stock buybacks is going to a very small slice of the American public.”

Curbing buybacks, Palladino and William Lazonick explain in a Roosevelt paper, would discourage practices that hurt workers and encourage higher wages and investment in innovation.

Learn how in “Regulating Stock Buybacks: The $6.3 Trillion Question.”


In the Weeds of Macroeconomic Policy

On this week’s episode of Vox’s The Weeds podcast, host Matthew Yglesias and Roosevelt’s Mike Konczal discuss the Federal Reserve, interest rates and unemployment, and the economic policy response to the pandemic.

“The fact that we actually took an opportunity to do fiscal stimulus well—we spent probably $5–6 trillion . . . we reduced poverty, we took real efforts to invest . . . is a huge deal,” Konczal says.

Learn more about how policymakers can continue to shepherd the recovery in “Reimagining Full Employment: 28 Million More Jobs and a More Equal Economy.”


EconCon 2021

On October 6 and 7, join experts, organizers, and advocates from Roosevelt and progressive organizations across the country at EconCon 2021, a virtual conference focused on building an economy that works for everyone. 

Explore this year’s EconCon sessions (including “Owning the Boom: The Transformative Effects of a Full-Employment Economy” with Roosevelt’s Mike Konczal) and register now.


What We’re Reading

“Neoliberalism Has Really Ruptured”: Adam Tooze on the Legacy of 2020 [feat. Roosevelt’s Mike Konczal] – Vox

Inequality Has Cost the US Nearly $23 Trillion since 1990 [feat. Roosevelt’s William “Sandy” Darity Jr.] – Bloomberg

COVID-19 and Human Freedom [by Roosevelt’s Joseph Stiglitz] – Project Syndicate

Could COVID-19 Finally End Hunger in America? – Politico

Skilled Workers Are Scarce, Posing a Challenge for Biden’s Infrastructure PlanNew York Times