Sen. Cory Booker, who is running for the Democratic presidential nomination next year, re-introduced a bill intended to curb the trend of corporate stock buybacks Thursday through a "worker dividend."
Initially introduced in March 2018, the "Worker Dividend Act" requires firms to distribute the value of its stock buybacks dollar-for-dollar. Here's how the legislation would work, according to an announcement from Booker, fellow Democrats Sen. Bob Casey of Pennsylvania and Rep. Joe Kennedy III of Massachusetts:
- It applies to publicly traded companies with at least $250 million in U.S. earnings during a given year.
- A company's obligation would be calculated as the lesser between that year's stock buybacks and 50% of the firm's profit above $250 million.
- The company's obligation would be distributed equally to each of the company's employees.
This legislation has a simple premise: when companies do well, workers should do well," New Jersey's Booker said in a news release. "There's no reason that a country as rich and as powerful as ours should have to choose between great wealth for the few, like corporate executives and shareholders, and great opportunity for all of its citizens, including its workers."
Booker's announcement comes as he struggles to gain traction in the Democratic primary race. While the New Jersey senator has appeared in all three debates so far, he is among the second tier of candidates in the sprawling field. Booker's polling average is slightly behind former Rep. Beto O'Rourke and entrepreneur Andrew Yang, according to Real Clear Politics.
The bill accompanies other similar legislation from Democrats, like Ohio Sen. Sherrod Brown's own worker dividend bill introduced in July. Other 2020 Democratic candidates have joined the fray too in targeting the more than $1 trillion in buybacks stemming from President Donald Trump's 2017 tax overhaul.
Sen. Elizabeth Warren of Massachusetts put forth a bill last summer requiring companies with over $1 billion in revenue to allow their workers to elect 40% of their board seats, while Sen. Bernie Sanders, I-Vt., along with Minority Leader Chuck Schumer of New York proposed a measure that would apply "preconditions" on buybacks that would force companies to offer higher wages and better health benefits.
In the face of growing backlash against wealth inequality, Wall Street has signaled its willingness to shift away from their primary goal of increasing shareholder value too.
In Washington, however, bills aimed at addressing wealth inequality have yet to pass the chamber, which is controlled by the GOP.
