Giant employers of lower-wage workers like McDonald's and Starbucks spent and borrowed money for stock buybacks and dividends.Labor unions and experts say all that shareholder money could have gone to worker raises and to shore up the balance sheet during the bull market to better prepare for a financial downturn.An employee hands a drive-thru customer his order at a McDonald's restaurant in Oak Brook, Illinois.
Some of America's biggest employers are beginning to discover the truth of this maxim as the coronavirus crisis catches them short of cash just as business crashes. Together, the restaurant, leisure and hospitality, and airline industries account for about 17 million U.S. jobs. And there's another reason why more workers are likely to get laid off if the crisis persists: Their employers are short of cash often because of stock buybacks.from the Trump administration to offer some form of federal bailouts to industries like casinos, airlines and maybe even restaurants hit hard by the sudden loss of business as states and municipalities order non-essential businesses to close or curtail their operations.
"This is more of the exaltation of shareholders over sensible business planning,'' said Judy Conti, government affairs director of the left-leaning National Employment Law Project. "It's yet another indicator of the failure of the [2017] tax bill. It didn't encourage higher wages or new jobs, but more greedy practices.
Maybe there should be Certified Financial Planners for corporations...oh, wait, that is a CFO's job.
Stock buybacks used to be against the law for a good reason. It's clearly time to fix it and make it illegal again.
I feel for the employees hurt in this. but I can’t feel bad for the corporations as a whole. You can’t rob the little guy forever without repercussions.
Corporate greed inspired by Trump's stupidity and MoscowMitchMCConnell fatcats
V2019N Shocking! I am shocked by this shocking set of shocking events.
Business often follows government lead. The Trump administration has refused to perform risk mitigation even to the extent of dissolving the NSA pandemic task force. Any business or government that ignores their risk mitigation responsibilities are neglectful.
Incorrect, they just need to sell the shares they bought back, just like people would. Better idea then just sending them a bailout
Too soon to retrospect. Journalism is good with finding fault in everything.