Representatives García, Khanna Introduce Legislation to Boost Jobs and Wages
Washington, DC- Representatives Jesús “Chuy” García (IL-04) and Ro Khanna (CA-17), introduced the Reward Work Act today, as a companion to legislation by Senator Tammy Baldwin (D-WI). This bill will address the explosion in so-called “stock buybacks.” Since the late 1970s, a growing share of economic growth has gone to Wall Street with little given to workers. This is especially true since the passage of the 2017 tax overhaul. Since President Trump signed that bill, corporate firms have spent more than $1 trillion on stock buybacks to pay out executives and shareholders. The Reward Work Act also gives workers a voice in choosing how their company is run by requiring public companies to directly elect one-third of the company’s board of directors and banning open-market stock buybacks.
Rep. García and Rep. Khanna introduced the bill in partnership with Rep. Rashida Tlaib (MI-13), Rep. Jan Schakowsky (IL-09), Rep. Alexandria Ocasio-Cortez (NY-14), Rep. Mark Pocan (WI-02), Rep. Pramila Jayapal (WA-07), and Rep. Ayanna Pressley (MA-7), Rep. Steve Cohen (TN-09), Rep. Mark DeSaulnier (CA-11) and Rep. André Carson (IN-07). In the Senate, the bill has been cosponsored by Senators Tammy Baldwin (WI), Elizabeth Warren (MA), Bernie Sanders (VT), and Brian Schatz (HI). This bill has been supported by organizations including AFL-CIO, Communication Workers of America, Public Citizens, Americans for Financial Reform and Take On Wall Street.
“When Republicans passed the 2017 Tax Scam, we were promised the bill would boost jobs and wages. Instead, workers who have not been laid off saw a paltry two-cent increase in pay in 2018 while corporations spent over $1 trillion buying shares of their own stock,” Rep. García said. “This bill will allow workers to actually benefit from their companies’ success and give them power in the board rooms of public companies.”
“Before 1982, stock buybacks were considered stock manipulation, but President Reagan’s Securities and Exchange Commission implemented a rule to exempt them. In allowing this practice to continue unabated, we only exacerbate the inequality in our country. Corporations are spending money on boosting their own stock at the expense of investing in innovation and their workforce. I’m proud to join Rep. Garcia as a cosponsor of the Reward Work Act to repeal this rule,” said Rep. Khanna.
“It’s just wrong for big corporations to pocket massive, permanent tax breaks and reward the wealth of top executives with more stock buybacks, while closing facilities and laying off workers,” said Senator Baldwin. “The explosion of corporate stock buybacks is driving wealth inequality and the Reward Work Act reins them in so that we can start investing in stronger, long-term economic growth. Corporate profits should be shared with the workers who create them. If we give workers a voice by providing them a seat at the table on corporate boards, we can help create shared economic prosperity in our country. We need to start rewarding hard work, and not just wealth.”
Wells Fargo was the biggest beneficiary of this tax bill, according to Vox. The corporation has bought back $40 billion of its own stock while laying off workers and being involved in numerous consumer protection scandals.
In 2018, Starbucks spent nearly $6 billion on stock buybacks. If Starbucks reallocated money from share buybacks, every worker could receive a $7,000 raise. Similarly, if Lowe’s, CVS and Home Depot did the same, each worker could receive of at least 18,000 per year.