According to President Trump, we live in “America’s largest economy and the best time EVER to look for a job.”
The details reveal something a little different. While unemployment may be low, workers are experiencing historically low wage growth, as companies respond to Trump’s recent tax cut by channeling their profits primarily to senior executives and big shareholders in the form of buyouts actions.
A Wall Street Journal analysis of how 1,111 companies pay their workers, released Wednesday morning, illustrates this in no uncertain terms. While “the median salary is between $ 44,000 and $ 95,000 for about half of the 1,111 companies in the S&P 1,500 index that disclosed the median salary of their employees,” zoom in on specific large companies that have actively filling the portfolios of their largest shareholders through share buyback programs reveals that the real priority here isn’t long-term sustainable increases for working middle class.
Theo Francis and Yaryna Serkez of the Journal found that “the employment of low-wage workers directly lowers the median wage. The median salary at McDonald’s was much lower, at $ 7,017, in part because McDonald’s directly employs hourly servers at more of its restaurants. McDonald’s low median salary comes as the fast food giant repurchased $ 1.6 billion of shares in the first quarter of 2018 alone.
“At Walmart, with 2.3 million workers, half earned less than $ 19,177,” Francis and Serkez discovered. Late last year, Walmart launched a $ 20 billion share buyback initiative to raise its stock price, disproportionately enriching the company’s biggest shareholders. .
Gap’s very low median salary of $ 5,375 per year coincided with the company’s $ 100 million share buyback last quarter.
The median salary at Chipotle was $ 13,582 – last year it offered a $ 100 million share buyback program. They started again in April. Yum Brands, the parent company of brands like Taco Bell, KFC and Pizza Hut, paid its employees a median annual salary of $ 9,111. At the end of last year, they proposed a $ 1.5 billion share buyback program and recently reported $ 528 million in buybacks in the first quarter of 2018 alone.
Amazon, abnormal with the companies on this list, has not made a share buyback for six years and its median salary was $ 28,446, according to the Journal.
Some of these numbers are misleading – the median salary at Dunkin Donuts seems high because most of its direct employees are office workers, for example, with almost everyone who works or operates retail stores working for franchisees. Likewise, Hasbro reported a median salary of $ 74,207 because it outsourced factory workers who earn much less, while Mattel’s figure of $ 6,271 reflects the fact that it directly employs its factory workers instead. than using secondary employment tactics. Other businesses employ many seasonal or part-time workers.
Overall, however, this is what weak wage growth looks like.
This is also how the American company operates. A study by the National Employment Law Project and the Roosevelt Institute, published Tuesday, found that between 2015 and 2017, “companies spent nearly 60% of their net profits on buyouts.” They are doing it instead of investing in workers’ compensation.
In fact, the restaurant industry spent more money on share buybacks than it actually earned in profits, fueling buybacks with existing debt and cash reserves. “Companies in the retail and food manufacturing industries spent 79.2% and 58.2%, respectively, of their net profits on share buybacks,” the report’s authors found. This was the situation just before the tax cut, adopted at the end of last year, caused an even bigger increase in buyouts, revealing the priorities of these companies and the politicians who fought so hard to cut corporate taxes.
If McDonald’s had spent the money it invested on share buybacks between 2015 and 2017, it could have granted a raise of $ 4,000 a year to its 1.9 million workers, according to the new study.
The effort to make the country’s richest investors even richer doesn’t stop with tax cuts and share buybacks – the Trump administration is also considering a ploy to bypass Congress and allow people who sell their assets to pay even less in capital gains, which would mean a $ 100 billion tax cut for the rich.