By Les Leopold / Original to ScheerPost

When I recently learned that Senator Sherrod Brown (D, OH) had reissued his 2019 essay, called “Wall Street’s War on Workers: Stock Buybacks,” I was shocked. My new book is called Wall Street’s War on Workers, and also focuses in part on the job-destructive impact of stock buybacks. 

Who stole what from whom?

Senator Brown didn’t know about my book, his essay was written before I started my book, and despite deep research I did not see his essay until two weeks ago. So, I was surprised, but I immediately understood why we both adopted the same big picture framework to understand the economy, and similar language to share our understanding with working people.  

As a labor educator, I’ve found that the big-picture framework is as important, maybe even more important, than facts and figures. In our complex world, problems hit working people from all angles — job insecurity, job loss, the high costs of housing, discrimination, kids who can’t afford to move out, and on and on.  To make sense of this mosaic, a framework helps hold the pieces together. In our educational program we see clearly that working people are hungry for a coherent explanation that connects the dots. And without a compelling alternative, the pressing need for frameworks can lead towards conspiracy theories.    

Brown and I are using the Wall Street War on Workers big picture framework for four reasons.  

  1. It’s flat out true.  Wall Street’s insatiable desire to extract wealth via stock buybacks, leveraged buyouts, hostile takeovers, and the like, are destroying the livelihoods and the well-being of thousands of working people each day in every sector of the economy.  
  2. The framework rings true to working people.  It’s understandable. It makes sense of their reality.  It explains why they, and so many others around them, have gone from one mass layoff to the other.  And it explains why they feel so strongly that the system is rigged against them.
  3. The framework breaks through fatalism. The dominant media explanation is that mass layoffs can’t be helped because technological change and globalization are unstoppable forces akin to natural laws. Wall Street’s War on Workers highlights human agency. Laws and regulations were changed to enable Wall Street to kill jobs at will for reasons that have nothing to do with new technology or trade. In the high-tech sector, for example, more than 260,000 workers experienced mass layoffs last year, and another 50,000 are gone so far this year. Almost none of those jobs were lost either due to globalization or new technologies, AI or otherwise.
  4. It’s good politics. Senator Brown wouldn’t be pushing this framework in the middle of a tight reelection campaign unless he believed it could help him deepen his base of support among working people, especially in areas that became increasingly Republican over the past two presidential elections.  It’s one thing for Bernie Sanders and Elizabeth Warren to take on Wall Street in their very liberal states. No one will defeat them. But Brown is using the anti-Wall Street frame to get reelected in Ohio, which has become solidly red. In our labor education courses, working people of all political persuasions find the anti-Wall Street framework very compelling.

Clearly, Brown does not believe that Ohio working people are fixated on anti-wokeness and blinded by racism, homophobia, xenophobia.  He understands that working people of all shades and colors are much more interested in maintaining their livelihoods than railing against wokeism. My book provides compelling data that also shows increasing working-class liberalism, not illiberalism, on hot-button issues like immigration, gay rights, and racism.  Ohio’s embrace of a constitutional amendment in 2023 that wrote abortion access into the state’s constitution confirms Brown’s intuitions and my findings. 

It’s one thing, however, for a labor educator to use the “Wall Street’s War on Workers” framework. To keep my job, I don’t have to run against Wall Street’s cash. But Sherrod Brown is taking a risk, maybe a big risk. And he’s not running away from the challenge or being mealy-mouthed about how Wall Street is ripping off the working class.  

His carefully documented essays show how big financial firms pressure corporations to hold down wages, please Wall Street through mass layoffs, and use stock buybacks to enrich Wall Street at the expense of working people.  Recently, he has put out a statement called “Taking on Wall Street and Housing,” which has a great deal in common my February 28th newsletter, “Wall Street to Working-Class Homebuyers: Fuggeddaboutdit!”   

Here are a few of Brown’s passages that highlight his (our!) big picture framework.

Wall Street’s focus on wealth accumulation for the rich is often by explicit design and comes at the direct expense of American workers.”

“…Wall Street does not view the workers making burritos at Chipotle as real people with real families. It does not view pilots and flight attendants at American Airlines as important positions critical to the safety and functioning of our airlines. Instead, to Wall Street, all of these workers are merely a line in a company’s budget to be minimized in the short-term and the long-term.”

Put simply, for the last several decades, companies have sought to please Wall Street so that their stock price will go up in the short-term. They know Wall Street analysts like it when…they lay off workers to show they’re serious about cutting expenses.

These data tell us that for decades corporations were getting richer by laying off their workers. It’s still true today.” 

It’s no surprise that cost-cutting measures typically include layoffs but rarely if ever include scaling back executive compensation.” 

“….They fired workers but somehow found the cash to buy back millions of dollars, sometimes billions of dollars, worth of their own shares. The coordinated timing of layoffs and buybacks isn’t a rare occurrence; it’s happening regularly throughout corporate America.”

So next time you or someone you know loses a job at a profitable, publicly traded company, it’s possible the layoff was part of a cost-cutting measure to please Wall Street and to make CEO paychecks bigger.”

Stock buybacks are one way publicly-traded corporations redirect money from workers to their shareholders.”

Proponents of stock buybacks argue that companies purchase their own shares only after considering other value-creating investment options. That’s ridiculous. Are we truly out of good ideas? Are all of our factories as updated as they can be? Are all workers getting family-supporting wages and being fairly compensated for the profits they create?”

Stock buybacks are not good for workers. End of story.”

Why aren’t the Democrats learning more from Brown?

It seems like a no-brainer for the Democrats to use the Wall Street framework to reconnect to the working-class folks they have lost and are losing, In the research for my book, it became clear that about 15-20 million Republican and Republican-leaning white working-class voters are socially liberal.  It is political malpractice to write them off. 

A major part of the problem is that many Democrats believe there’s nothing much that can be done about mass layoffs – that layoffs are the inevitable result of the unstoppable forces of new technologies and global trade.  It’s as if even liberal politicians don’t want to look too closely at how the deregulation of Wall Street, aided and abetted by both political parties since the 1980s, has enriched Wall Street at the expense of working people, and especially at the expense of job stability. It’s far easier to blame AI and the like. 

Clearly, the effort to create new jobs via infrastructure bills is far less controversial.  In those bills, the government provides major subsidies for corporations while opening up new job possibilities for working people. Win-win! 

But those investments won’t stop the Wall Street-induced mass layoffs that are ripping through the economy each and every day. Nor are there any real brakes being placed on Wall Street’s use of job-destructive stock buybacks and leveraged buyouts to enrich the wealthy. Win-lose!

Unfortunately, there may also be baser motives at play. The richer Wall Street becomes, the more it can influence politics through donations and lobbying. Some politicians, it seems, also have their eyes out for lucrative jobs after leaving office as a Wall Street lobbyists or private equity/hedge fund operatives.  

Upton Sinclair identified this problem as he ran for the governor of California in 1934.  In his book, “I, Candidate for Governor: And How I Got Licked,” he famously wrote:

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

It’s hard for any of us to buck the conventional wisdom that downplays mass layoffs and extols billionaires.  But Sherrod Brown is doing just that. If he beats the odds again in 2024 and wins, the Democratic Party should follow his lead. 

For working people to gain the stable jobs and decent incomes they truly deserve, Wall Street needs to be reined in…and soon.    

Les Leopold is the executive director of the Labor Institute and author of the new book, “Wall Street’s War on Workers: How Mass Layoffs and Greed Are Destroying the Working Class and What to Do About It.” (2024). Read more of his work on his Substack here.

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Les Leopold

After graduating from Oberlin College and Princeton University’s School of Public and International Affairs, Les Leopold co-founded the Labor Institute in 1976, a nonprofit organization that designs research and educational programs on occupational safety and health, the environment, and economics for unions, worker centers, and community organizations. He continues to serve as executive director of the Labor Institute and is currently working to build a national economic educational train-the-trainer program with unions and community groups.

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