[Congressional Record Volume 165, Number 103 (Wednesday, June 19, 2019)]
[Extensions of Remarks]
[Page E791]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  INTRODUCTION OF THE REWARD WORK ACT

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                     HON. JESUS G. ``CHUY'' GARCIA

                              of illinois

                    in the house of representatives

                        Wednesday, June 19, 2019

  Mr. GARCIA of Illinois. Madam Speaker, I rise today to support a bill 
I have introduced with Congressman Khanna, the Reward Work Act.
  Economic inequality has been spiraling for decades, and since the 
1970s, corporate firms have increasingly relied on stock buybacks--
juicing the price of their own stock in order to pay out huge sums to 
their executives and wealthy shareholders. These buybacks divert 
investment away from workers, long-term business growth, and research 
and development.
  Since the tax overhaul in 2017, corporations have spent more than $1 
trillion on buybacks, while failing to deliver promised wage increases 
to workers. Wells Fargo was the single biggest beneficiary of the tax 
bill. Even as they have laid off workers and been exposed for numerous 
consumer protection scandals, they have bought back $40 billion of 
their own stock.
  Starbucks spent nearly $6 billion on stock buybacks in 2018. If 
Starbucks reallocated money from share buybacks to compensation, every 
worker could get a $7,000 raise. If Wal Mart ended its stock buybacks 
and spent $10 billion on increasing wages instead, 1 million low-wage 
Wal Mart workers would enjoy an hourly wage increase of $5.66.
  Pharmaceutical giants are increasingly diverting money that could be 
spent on life-saving drugs into stock buybacks. In 2017 and 2018, 
shareholder payments by the 10 largest pharmaceutical companies 
increased by 75 percent to nearly $115 billion. Shortly before the tax 
bill passed, Pfizer announced a $10 billion buyback, then turned around 
and announced that they were ending research into Alzheimer's and 
Parkinson's.
  Firms like Wal Mart are so committed to paying out their wealthiest 
shareholders that they'll even take on new debt to do it. Firms are 
increasingly doing share buybacks with risky leveraged loans, which 
have been identified by regulators as a growing threat to financial 
stability.
  The Reward Work Act will give workers a voice in choosing how their 
company is run. Instead of enriching executives and shareholders, 
directors elected by workers can advocate for better wages. Wages in 
countries that require worker representation on corporate boards are 
18-25 percent higher than wages in the United States.
  I am grateful for the support of the AFL-CIO, Communication Workers 
of America, Americans for Financial Reform, and Take On Wall Street.
  I urge this body to swiftly pass this bill and help curb the growth 
of runaway inequality.

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