Instead of using their massive windfall from the Republican corporate tax cut bill to create jobs and raise workers' wages, corporations have been funneling their profits back into their companies through buybacks, a financial maneuver that was illegal in the U.S. until 1982 in which a company manipulates its stock prices by purchasing its own shares.
Rep. Keith Ellison (D-Minn.) last week introduced the Reward Work Act, which would prohibit these harmful stock buybacks that only enrich top executives and large shareholders. Senator Tammy Baldwin (D-Wisc.) has introduced similar legislation in the Senate.
Buybacks have exploded in the wake of the tax bill, with companies poised to buy back the largest number of shares in at least 10 years. By buying back their own stock, companies are artificially boosting their stock prices without actually becoming more profitable or hiring more workers.
"While buybacks enrich Wall Street and corporate executives, they have harmful effects on workers," said CWA Legislative Director Shane Larson. "For example, AT&T bought back $145 million in stock in the first quarter of 2018, but has rebuffed thousands of workers' demands for better job security in ongoing contract negotiations at AT&T Midwest and Legacy T. Congress should pass the Reward Work Act to help address one of the most harmful aspects of the Republican corporate tax cut bill."