Last Updated on July 19, 2025 by ThePublic
In the glittering world of corporate America, a subtle yet insidious practice is quietly reshaping the economy, stock buybacks. Far from being a neutral financial tool, buybacks are a mechanism that funnels wealth from workers to the ultra-rich, exacerbating inequality and undermining the very foundation of economic fairness. Legalized in 1982, this practice has become a cornerstone of corporate greed, rewarding executives and shareholders while leaving workers, the true creators of value, struggling to survive.
The Mechanics of a Corporate Scam
A stock buyback occurs when a company uses its profits to repurchase its own shares from the open market. This reduces the number of shares outstanding, artificially inflating the value of each remaining share and boosting metrics like earnings per share (EPS). On the surface, it appears as a sign of corporate health. In reality, it’s a sleight of hand.
Buybacks don’t make a company more innovative, efficient, or valuable. They don’t lead to new products, better services, or job creation. Instead, they manipulate stock prices to benefit those who already hold wealth—primarily executives and large shareholders. Since many CEO compensation packages are tied to stock performance, buybacks create a perverse incentive: executives can authorize buybacks, watch the stock price rise, and then cash out their own shares for massive personal gains.
This practice, greenlit by the SEC’s Rule 10b-18 in 1982, has become a corporate addiction. In 2022 alone, S&P 500 companies spent $922 billion on buybacks, a figure that dwarfs investments in research, development, or employee compensation. The result is a rigged game where wealth is extracted from the labor of workers and redirected to those at the top.
The Human Toll of Corporate Greed
The cost of this financial maneuvering is borne by workers. Every dollar spent on buybacks is a dollar not invested in:
- Living wages that keep pace with inflation.
- Affordable healthcare for employees and their families.
- Job security in an era of layoffs and gig work.
- Workplace safety to protect those on the front lines.
- Innovation that could drive long-term growth.
Consider McDonald’s, a prime example of this trend. Between 2015 and 2023, the company spent $7 billion on stock buybacks and $4 billion on shareholder dividends, a total of $11 billion that enriched investors. Meanwhile, the average McDonald’s crew member earns approximately $12 per hour, or about $25,000 annually for full-time work. This wage is barely enough to cover basic living expenses in most U.S. cities, leaving workers vulnerable to debt, housing insecurity, and financial stress.
If that $11 billion had been distributed among McDonald’s 150,000 U.S. employees, each could have received a $73,000 bonus—enough to pay off loans, secure housing, or invest in education. Instead, the wealth generated by workers’ labor flowed to shareholders and executives, including CEO Christopher Kempczinski, whose 2024 compensation reached $19.2 million, or 1,212 times the median employee salary.
This isn’t an isolated case. Across industries, buybacks have become a tool to prioritize shareholder value over human value, leaving workers to shoulder the burden of stagnant wages and precarious employment.
A System Rigged Against Workers
Why don’t workers push back? The answer lies in their economic reality. Most frontline employees live paycheck to paycheck, making strikes or collective action a risky proposition. Missing even a single week of pay can lead to eviction, medical debt, or hunger. Add to that the threat of retaliation, weak labor protections, and a corporate culture that discourages unionization, and workers are left with little leverage to demand their fair share.
The numbers tell a stark story:
- The top 10% of Americans own 89% of all U.S. stocks, while the bottom 50% hold just 1%.
- Since 1982, buybacks have contributed to a 400% increase in the ratio of CEO-to-worker pay, from 20:1 to over 344:1 by 2023.
- Corporate profits have soared, but real wages for the bottom 50% of earners have barely budged in decades.
This isn’t capitalism, it’s extraction. Buybacks don’t create wealth; they redistribute it upward, widening the chasm between the haves and have-nots.
The Economic Fallout
The obsession with buybacks has broader consequences. By prioritizing short-term stock price gains, companies sacrifice long-term growth. Since 1982, corporate America has:
- Diverted capital from research and development, stifling innovation.
- Cut jobs and outsourced labor to reduce costs.
- Neglected infrastructure, training, and employee development.
This short-sightedness undermines economic stability. When companies prioritize shareholders over workers, they erode consumer purchasing power, weaken demand, and create a cycle of stagnation. Meanwhile, wealth concentrates in fewer hands, fueling inequality that destabilizes society.
A Path to Reform
This system isn’t inevitable—it’s a choice, and it can be undone. Here are five actionable steps to rebalance the economy:
- Ban or Tax Stock Buybacks: Repeal or amend Rule 10b-18 to restrict buybacks, or impose a steep tax on them, redirecting revenue to public goods like infrastructure, education, or healthcare.
- Link Executive and Worker Pay: Cap CEO-to-worker pay ratios at a reasonable level, such as 50:1, and tie executive bonuses to metrics like employee retention, wage growth, or workplace safety.
- Empower Workers: Strengthen labor protections and make it easier for workers to unionize without fear of retaliation, giving them a voice in corporate decision-making.
- Incentivize Reinvestment: Offer tax breaks to companies that invest in their workforce, innovation, or operations rather than financial engineering.
- Raise Awareness: Educate the public about the true cost of buybacks. Transparency initiatives, like mandatory disclosure of buyback impacts on workers, can shift public and shareholder pressure toward fairness.
These reforms aren’t anti-business, they’re pro-worker, pro-growth, and pro-sustainability. They recognize that a thriving economy depends on the people who power it, not just those who own it.
The Bigger Picture
Stock buybacks are more than a financial maneuver, they’re a symptom of a system that values wealth over work. They expose a fundamental disconnect: the people who create value—through their labor, dedication, and ingenuity—are systematically denied their share of the rewards.
McDonald’s workers aren’t alone. From retail to tech to manufacturing, millions of Americans are caught in the same trap: their productivity fuels corporate profits, but their wages barely keep them afloat. Meanwhile, the top 1%, bolstered by buybacks and dividends, see their wealth grow exponentially.
A Call to Action
The next time you hear about a company’s “record profits” or soaring stock price, ask: Who’s really paying for it? The answer is the workers, the ones stocking shelves, delivering goods, and keeping businesses running. Stock buybacks aren’t just a corporate strategy, they’re a deliberate choice to prioritize the rich over the rest.
This isn’t about left or right, it’s about right and wrong. It’s about reclaiming an economy that rewards effort, not just ownership. It’s about ensuring that the people who build the wealth share in its benefits.
If that resonates with you, don’t just get angry, get active. Support policies that prioritize workers. Demand transparency from corporations. And hold lawmakers accountable for dismantling a system that’s been rigged for too long.
The corporate heist may be hiding in plain sight, but it’s not invisible. It’s time to call it what it is, and put an end to it.