Corporations Should Share the Wealth Before Buying Back Stock

Sarah Anderson

Sarah Anderson Director, Global Economy Project, Institute for Policy Studies

These are good times for those at the top of the Walmart empire. Family members of the founders have seen their wealth grow about 10,000% since the 1980s. Today the Waltons are worth about $180 billion. And they own so much Walmart stock that four of them made $12.7 billionin just one day last year after a profit report bumped up their share price.

For Walmart CEO Doug McMillon, those strong profits turned into a $22 million paycheck.

But those at the top of the Walmart empire are not sharing the wealth. The CEO’s pay was 1,188 times as much as the pay for a typical Walmart employee.

And even after the Republican tax “reform” that was supposed to be so great for workers, Walmart still refuses to pay a living wage. Instead, those tax cuts are making already rich CEOs and shareholders even richer.

How is this happening? Walmart and other big U.S. corporations are using huge chunks of their tax windfalls to buy back their own stock.

These buybacks have no redeeming social value. They simply artificially inflate a company’s share price. That helps the rich who own the vast bulk of stock. At Walmart, the Walton family owns about half.

Buybacks also boost executive pay, since most of it is based on stock.

In other words, whenever companies go on a buyback spree, the rich just get richer.

Walmart announced plans in 2017 to spend $20 billion on stock buybacks over a two-year period. What if they spent some of those billions instead on worker pay? Berkeley researchers estimate it would cost Walmart less than $5 billion a year to raise its minimum wage to $15 an hour.

We should consider banning stock buybacks altogether, like they were until 1982. In the meantime, we should make sure companies can only repurchase their stock if they’re sharing the wealth. This would be good for workers, good for business, and good for the broader economy.

Posted In: Allied Approaches

Union Matters

Members of Local 7798 achieve major goal with workplace violence policy

From the USW

Workers at Copper Country Mental Health Services in Houghton, Mich., obtained wage increases and pension improvements in their contract ratified earlier this year, but the benefit Local 7798 members were most proud of bargaining was language regarding workplace violence.

The contract committed the employer to appoint a committee, including two members of the local, to draft a workplace violence policy. Work quickly began on the policy, and just last week, the committee drafted and released its first clinical guideline focusing on responding to consumer aggression toward staff.

“We are so excited to have this go into effect,” said Unit Chair Rachelle Rodriguez of Local 7798. “This was a direct result of our last negotiating session.”

The guideline includes the definition of aggression and an outline of procedures, all of which will be reviewed yearly. And though this is just a first step in reducing the incident rates and harm of workplace violence in their workplace, it still is a big one for the local, and it wouldn’t have been possible without a collective bargaining agreement.

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There is Dignity in All Work

There is Dignity in All Work