Sending Office: Honorable Jesus G. “Chuy” Garcia
Corporations Should Invest in Workers, Not Buybacks: Cosponsor the Reward Work Act
Cosponsors: Garcia (IL), Khanna, Tlaib, Schakowsky, Ocasio-Cortez, Pocan, Pressley
Senate Companion Cosponsors: Baldwin, Warren, Gillibrand, Sanders, and Schatz.
Supporting Organizations: AFL-CIO, CWA, Public Citizen, Americans for Financial Reform, and Take On Wall Street
Please join me in supporting the
Reward Work Act, a bill to ban stock buybacks and ensure that workers have a voice on corporate boards.
There has been an explosion in so-called “stock buybacks,” which exacerbate the spiraling inequality that has plagued our economy for decades. Since the late 1970s, a growing share of economic growth goes to Wall Street, while a smaller share goes to workers.
Corporations are investing in their shareholders instead of their workers. The Reward Work Act seeks to reverse this trend by requiring public companies to directly elect one-third of the company’s board of directors and by banning open-market stock buybacks.
Spending on stock buybacks crowds out spending that corporations could be spending on research and development, innovation, and higher wages for their workers. According to an analysis by
Vox, “From 2007 through 2016, S&P 500 companies
distributed $4.2 trillion to shareholders through stock buybacks and an additional $2.8 trillion through dividends, totaling $7 trillion in shareholder payouts. From 2003 through 2012, S&P companies
used 54 percent of their total earnings — $2.4 trillion — to buy back stock.”
The 2017 tax bill made this problem even worse. Since the tax bill passed in December of 2017, firms have announced
over $1 trillion in stock buybacks. Pfizer announced a $10 billion stock buyback in the run-up to the tax bill’s passage. Then they announced that they would lay off 300 workers and abandon research
efforts into treating Alzheimer’s and Parkinson’s. Scandal-plagued Wells Fargo — the single biggest beneficiary from the tax bill — has spent over $40 billion on buybacks since the bill passed; Wells Fargo even increased the salary of CEO Tim Sloan to $18.4
million shortly before he announced his resignation.
For more information or to co-sponsor the Reward Work Act, please contact Jordan Haedtler with Rep. Chuy Garcia’s office at Jordan.Haedtler@mail.house.gov and/or Kevin Fox with Rep. Ro Khanna’s office at
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