Buybacks, Not Bonuses. Over the past two months, corporations announced plans to buy back $178 billion of their stock. That’s more than 30 times the $5.6 billion in bonuses and pay increases that were announced with great fanfare.
CEOs Win, Workers Lose. Since buybacks boost share values, the winners are the wealthiest one percent (including corporate CEOs) who own 40 percent of all stocks. But buybacks come at a cost: plant closings, layoffs and cutbacks in research and development. For instance, the drug-maker Pfizer is buying back $10 billion of its own stock, while halting research on treatments for Parkinson’s and Alzheimer’s and laying off 300 employees.
Productive Workers Betrayed. The conglomerate Kimberly-Clark racked up $3.3 billion in profits last year. Now, it’s laying off 5,500 workers.
- At K-C’s plant in Fox Crossing, Wisconsin, machine operator Jessica Schiessl recalled, “Three weeks before, we had a meeting, and they said we’d beaten and exceeded all the goals. Three weeks later they called us back in the same room and said we were shutting down. It was shocking. It made you want to vomit.”
- With 25 years’ service, Paul Luebke said, “We took nothing and built it into a billion-dollar business. This is our reward.”