WASHINGTON, DC — Today, Representatives Jesús "Chuy" García (IL-04), Ro Khanna (CA-17), and Val Hoyle (OR-04) reintroduced the Reward Work Act to ban stock buybacks and increase worker power.
The Reward Work Act reins in stock buybacks by repealing a Reagan-era Securities and Exchange Commission (SEC) loophole that allows corporations to buy back their stock on the open market. This legislation also empowers workers by requiring public companies to allow workers to directly elect one-third of their company’s board of directors.
“Stock buybacks were considered market manipulation, and therefore illegal, until Reagan-era market deregulation. Companies buy shares of their own stock to enrich shareholders instead of increasing wages or investing in better goods and services,” said Rep. García. “Last year, companies spent $1.2 trillion on buybacks as worker wages barely kept pace with inflation. It’s time we stop allowing corporate executives to make millions by buying back their own stock while workers and consumers pay the price.”
“Prior to 1982, stock buybacks were considered illegal stock manipulation, but President Reagan's Securities and Exchange Commission implemented a rule to exempt them. Since then, we’ve seen corporations spending money on boosting their own stock at the expense of investing in innovation and their workforce, increasing wages, or lowering prices. Over the past year, Big Oil companies and other industries drove up costs for consumers while rewarding their shareholders with buybacks. It’s time to put a stop to this greed. I'm proud to join Reps. García and Hoyle as a cosponsor of the Reward Work Act to repeal this rule that has only exacerbated inequality in our country," said Rep. Khanna.
“I am proud to co-lead the Reward Work Act with Representatives García and Khanna. Stock buybacks are the epitome of corporate greed,” said Rep. Hoyle. “Corporate executives are skimming money off the top to put in their own pockets as opposed to investing it back in America, our communities, and their workforce.”
"Rampant use of stock buybacks is a way big corporations serve the short-term interests of Wall Street instead of the interests of workers, communities, the planet, and people saving for retirement. By requiringa third of board members to be elected by workers and getting rid of a 1982 loophole that opened the floodgates to corporations spending trillions of dollars on stock buybacks, the Reward Work Act would create the conditions for addressing our ever-expanding economic inequality and the racial wealth gap,” said Natalia Renta, Senior Policy Counsel, Americans for Financial Reform.
“We've seen time and time again that companies spend huge sums on stock buybacks, while refusing to give their workers their fair share. Companies like Apple have used company earnings not to invest in better equipment or operations or to pass along gains to workers, but to buy back hundreds of billions of dollars in stock to enrich the CEOs and wealthy shareholders. Workers are the backbone of any company's success. The Reward Work Act will help ensure that companies increase worker pay and benefits, invest in new equipment, or expand into new markets and create more jobs,” said Dan Mauer, Director of Government Affairs, Communications Workers of America (CWA).
"Consensus is building. Corporate stock buybacks artificially inflate stock prices, put more money in the pockets of the wealthy, harm workers, and widen the racial wealth gap. It’s time we get rid of them and ensure that companies reinvest profits that were created by labor into higher wages, better products, and long-term growth. Take On Wall Street is proud to support the Reward Work Act," said Jessica Church, Advocacy and Political Manager, Take On Wall Street.
“There’s an expert missing from the boards of big corporations in America. That expert is the worker who spends countless hours in stores and facilities powering the corporation’s profits. The one who manages operations and troubleshoots problems to keep things running. The one who balances customer satisfaction and employee well-being. The one who is also struggling to put food on the table and save for retirement. Working people like me have a vested interest in seeing the corporations we work at thrive, which means investing in us. Walmart’s billion dollars in stock buybacks could have given Walmart workers a liveable wage so that we aren’t relying on public assistance to make ends met. We know that in order to truly thrive, board members have to deliver more than empty promises and blanket policies that serve no purpose. Our valuable input and solutions are needed at the decision-making table to rein in corporate greed and prioritize workers,” said Cyndi Murray, Founding Member of United for Respect and longtime Walmart Associate
“Big US-based fashion companies like Nike left millions of low-wage garment workers in their supply chain across Asia in crisis after their purchasing practices during the pandemic caused massive income losses and wage theft,” said Anannya Bhattacharjee, International Coordinator of the Asia Floor Wage Alliance (AFWA). “As business rebounded, Big Fashion executives focused on enriching themselves and their shareholders with billions of dollars in stock buybacks instead of paying workers the income they lost. AFWA, Global Labor Justice - International Labor Rights Forum (GLJ-ILRF), and unions across Asia launched the Fight the Heist Campaign to demand these companies take responsibility for their global supply chains and pay living wages to the workers who make their products. That's why garment supply chain workers are linking arms with U.S. workers in calling out Wall Street and supporting the Reward Work Act – it is critical in the fight to win fair pay for workers in the U.S. and around the world.”
The following Members are original cosponsors of the Reward Work Act: Representatives: Jamaal Bowman (NY-16), Cori Bush (MO-01), André Carson (IN-07), Greg Casar (TX-35), Rosa DeLauro (CT-03), Chris Deluzio (PA-17), Mark DeSaulnier (CA-10), Maxwell Alejandro Frost (FL-10), Raúl M. Grijalva (AZ-07), Sheila Jackson Lee (TX-18), Pramila Jayapal (WA-07), Henry C. "Hank" Johnson, Jr. (GA-04), Greg Landsman (OH-01), Barbara Lee (CA-12), Summer Lee (PA-12), Ted W. Lieu (CA-36), Betty McCollum (MN-04), Jim McGovern (MA-02), Donald Norcross (NJ-01), Eleanor Holmes Norton (DC-01), Alexandria Ocasio-Cortez (NY-14), Ilhan Omar (MN-05), Mark Pocan (WI-02), Katie Porter (CA-47), Jan Schakowsky (IL-09), Rashida Tlaib (MI-12), Bonnie Watson Coleman (NJ-12).
This legislation is supported by the following organizations: AFL-CIO, American for Financial Reform (AFR), Association of Flight Attendants-CWA, Communication Workers of America (CWA), Groundwork Collaborative, Indivisible, Institute for Policy Studies Global Economy Project, NETWORK Lobby for Catholic Social Justice, Public Citizen, SEIU, Take on Wall Street, United for Respect, Woodstock Institute.
The text of the bill can be found here.
Photos from the press conference can be found here.
###
