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
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.
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.
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.
What We’re Reading
COVID-19 and Human Freedom [by Roosevelt’s Joseph Stiglitz] – Project Syndicate