Sens. Charles Schumer (D-N.Y.) and Bernie Sanders (I-Vt.) are planning to introduce a bill that would prevent corporations from buying back its own stock and push for employees to be paid at least $15 an hour.
In an op-ed written by the two senators published in The New York Times Sunday, the pair argues that “corporate boardrooms have become obsessed with maximizing only shareholder earnings to the detriment of workers.”
In an attempt to combat the issue, the two senators will introduce legislation that imposes “preconditions,” including the $15 minimum wage, on a company’s ability to buy its own shares.
“Our legislation would set minimum requirements for corporate investment in workers and the long-term strength of the company as a precondition for a corporation entering into a share buyback plan. The goal is to curtail the overreliance on buybacks while also incentivizing the productive investment of corporate capital,” they wrote.
The requirements include paying all workers at least $15 per hour, giving all employees at least seven days of paid sick leave, and providing workers with “decent pensions” and solid health benefits.
Schumer is the Senate minority leader and Sanders caucuses with Senate Democrats.
The two pointed to the tax cut passed by the Trump administration in late 2017 that they argue overwhelmingly benefitted corporations and hurt workers.
“Fueled by the Trump tax cut, in 2018, United States corporations repurchased more than $1 trillion of their own stock, a staggering figure and the highest amount ever authorized in a single year,” the senators write.
They point to specific examples, such as Walmart, which spent $20 billion on a share repurchase program but subsequently laid off thousands of workers and shuttered several Sam’s Club stores.
Sanders and Schumer argue the company could have used the money to raise hourly wages for workers instead of buying back corporate shares.
“At a time of huge income and wealth inequality, Americans should be outraged that these profitable corporations are laying off workers while spending billions of dollars to boost their stock’s value to further enrich the wealthy few,” the senators write.
Walmart has been a frequent target of Sanders, with the progressive lawmaker introducing a similar bill last year aimed directly at the company called the Stop Walmart Act.