American corporations are simply raking in profits. Some are so bloated and cash-rich they literally can't figure out what to do with it all. Apple, for instance, is sitting on nearly a quarter of a trillion dollars — and that's down a bit from earlier this year. Microsoft and Google, meanwhile, were sitting on "only" $132 billion and $63 billion respectively (as of March this year).
However, American corporations in general are taking those profits and kicking them out to shareholders, mainly in the form of share buybacks. These are when a corporation uses profits, cash, or borrowed money to buy its own stock, thus increasing its price and the wealth of its shareholders. (Big Tech is doing this as well, just not fast enough to draw down their dragon hoards.) As a new joint report from the Roosevelt Institute and the National Employment Law Project by Katy Milani and Irene Tung shows, from 2015 to 2017 corporations spent nearly 60 percent of their net profits on buybacks.
Wall Street bloodsuckers are not at all subtle about it, screaming bloody murder and tanking stocks every time a public company proposes paying workers instead of shareholders.
SCROLL TO CONTINUE WITH CONTENT
No advertising; no paywalls: our content is free.
But our costs are real. Over 90% of the not-for-profit Common Dreams budget comes from reader support. If you're a regular reader—or maybe a new one—and you haven't yet pitched in, could you make a contribution today and help keep us going?
No amount is too large or too small. Please select a donation method:
This practice should be banned immediately, as it was before the Reagan administration.
The most immediately objectionable consequence of share buybacks is they come at the expense of wages. Milani and Tung calculate that if buybacks spending had been funneled into wage increases, McDonald's employees could get a raise of $4,000; those at Starbucks could get $8,000; and those at Lowes, Home Depot, and CVS could get an eye-popping $18,000.
Read the full article here.