author

Irene Tung

Senior researcher and policy analyst at the National Employment Law Project (NELP)

“ On average, companies used to reinvest 20 cents of each dollar of their operating returns into their businesses; that amount has dropped by half—to just 10 cents of each dollar since 2002.” Across the U.S. economy from 2015 - 2017, companies spent 58.6% of their net profits on stock buybacks. From 2015 - 2017, the U.S. restaurant industry spent more in stock buybacks than it made in profits - 136.5%. Buybacks were financed through debt and cash reserves. If McDonald's redirected all 2015 - 2017 funds used on stock buybacks to raises for its employees, it could have given each of its 1.9 million workers nearly $4,000 more per year. If Starbucks reallocated its funding from stock buybacks to worker wages, every worker would receive a $7,000 raise. If Lowes, Home Depot, and CVS each reallocated the money spent on buybacks in 2015 - 2017 to workers, each worker would receive a raise of at least $18,000 per year.
Curbing Stock Buybacks: A Crucial Step to Raising Worker Pay and Reducing Inequality
Codetermination
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