Surprise, surprise! It may be spring but the American worker has been left out in the cold.
As CNN reports: It’s raining buybacks: Corporate America is throwing a record-setting party for shareholders.
Despite predictions when it passed, the mega tax cut has not been a boon to workers. It has been very good for shareholders and company executives. From CNBC:
- Employers appear to be using proceeds from corporate tax cuts to continue the practice of rewarding shareholders and executives over workers.
- In the first quarter of 2018, corporate America dedicated $305 billion to stock buybacks and cash takeovers compared with $131 billion in pretax wage growth, according to TrimTabs, which compiles market and economic data and operates an ETF that focuses on firms with high levels of free cash flow.
“We’re going to see something that’s going to be very special. We’re getting rid of all the knots and all the ties, and you’re going to see. You’re going to see what happens. And ultimately, what does it mean? It means jobs, jobs, jobs, jobs.”–Donald Trump, Dec. 20, 2017
Don’t tell that to the workers at the Harley Davidson plant in Kansas City. The plant was closed and 800 workers lost their jobs. According to Vox:
- The company was shifting operations to another facility in Pennsylvania.
- “Just days later, the company announced a dividend increase and a stock buyback plan to repurchase 15 million of its shares, valued at about $696 million.”
- It’s a pattern that’s played out over and over since the tax cuts passed — companies profit, shareholders reap the benefits, and workers get left out. Corporate stock buybacks hit a record $178 billion in the first three months of 2018; average hourly earnings for American workers are up 67 cents over the past year.
Stock buy backs are at all time high with markets only 2-3% below all-time highshttps://t.co/ABq5SMaxbT
— Michael Baron (@baronadv1) May 22, 2018