Program director for the Roosevelt Institute
On average, companies used to reinvest 20 cents of each dollar of their operating returns into their businesses; that amount has dropped by half—to just 10 cents of each dollar since 2002.”
Across the U.S. economy from 2015 - 2017, companies spent 58.6% of their net profits on stock buybacks.
From 2015 - 2017, the U.S. restaurant industry spent more in stock buybacks than it made in profits - 136.5%. Buybacks were financed through debt and cash reserves.
If McDonald's redirected all 2015 - 2017 funds used on stock buybacks to raises for its employees, it could have given each of its 1.9 million workers nearly $4,000 more per year.
If Starbucks reallocated its funding from stock buybacks to worker wages, every worker would receive a $7,000 raise.
If Lowes, Home Depot, and CVS each reallocated the money spent on buybacks in 2015 - 2017 to workers, each worker would receive a raise of at least $18,000 per year.
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Curbing Stock Buybacks: A Crucial Step to Raising Worker Pay and Reducing Inequality