FOR IMMEDIATE RELEASE:
February 14, 2019
Ariela Weinberger, firstname.lastname@example.org
Roosevelt Senior Economist Explores Corporate Prosperity and the Decline of Employee Bargaining Power
Research finds that the rise of shareholder primacy has contributed to America’s high-profit, low-wage economy
NEW YORK, NY – Today, the Roosevelt Institute, a New York-based think tank that promotes progressive economic and political policy reforms, released the working paper Ending Shareholder Primacy in Corporate Governance to explain how the ideology of shareholder primacy hinders a brighter economic future for today’s workers. Authored by Lenore Palladino, Senior Economist and Policy Counsel at the Roosevelt Institute, the paper argues that shareholder demand for increasing payments has hurt employee bargaining power and contributed to wage stagnation.
“Nearly fifty years of increasing focus on shareholder payments has cost American workers the chance to do well when corporations do well,” said Palladino. “The misguided assumption that corporate prosperity should benefit only shareholders has hurt the ability of employees to bargain for a share of that prosperity—which they help create—and held back a growing economy.”
This paper follows a call from US Senators Chuck Schumer (D-NY) and Bernie Sanders (I-VT), along with other leading senators, to put workers first and prioritize long-term economic growth by curbing stock buybacks. Palladino explains why the government must limit stock buybacks, reorient corporate rules toward a stakeholder-inclusive framework, and require that a share of board seats be reserved for worker representation. These bold policies can help rebalance bargaining power within US firms and repair the broken link between corporate profits and employee security and well-being.
“It is critical to rewrite the rules that encourage corporations to prioritize rewarding shareholders above all,” said Palladino. “Adopting a stakeholder governance model and curbing stock buybacks are necessary steps toward more-inclusive corporate behavior.”
For nearly half of a century, corporations and the wealthy elite have distorted the rules of corporate America, and our economy more broadly, to benefit themselves—largely at the expense of everyone else. With corporate profits at record highs, policymakers should ensure that US companies are accountable to the public again, and especially to the workers who helped create the corporate prosperity we see today.
About the Roosevelt Institute
The Roosevelt Institute, a New York-based think tank, promotes bold policy reforms that would redefine the American economy and our democracy. With a focus on curbing corporate power and reclaiming public power, Roosevelt is helping people understand that the economy is shaped by choices—via institutions and the rules that structure markets—while also exploring the economics of race and gender and the changing 21st-century economy. Roosevelt is armed with a transformative vision for the future, working to move the country toward a new economic and political system: one built by many for the good of all.
To keep up to date with the Roosevelt Institute, please visit us on Twitter or follow our work at #RewriteTheRules.