Corporate profits and executive pay are sky high today, while wages for most American workers have remained low and stagnant over the past several decades. Today’s high-profit, low-wage economy is, in part, a result of rules and policies that shape corporate decision-making. These rules have allowed CEOs, shareholders, and executives to move more and more profits up and out of US corporations—at the expense of workers, business investment, and long-term economic growth. Stock buybacks are the tip of the spear of the larger trend in which profits are extracted from corporations by shareholders, rather than reinvested back into the company in a virtuous loop of continuous productivity growth, in which multiple stakeholders—including workers, smaller businesses along the supply chain, and the public—benefit.

Stock buybacks are a clear example of how the rules of the economy have been written to benefit wealthy shareholders at the expense of American workers. By privileging shareholder payouts over productive investment and employee compensation, buybacks contribute to innovation stagnation, pay inequality, and potentially market manipulation. This extractive corporate behavior hurts workers and families and is hollowing out our economy. Ending the practice of stock buybacks is a bold but crucial step in reversing this.

Of course, simply curbing or ending the practice of open-market share repurchases will not, in and of itself, cause firms to productively invest or raise employee compensation. Rebalancing power within corporations will require a broad range of needed policy proposals. However, the long-term project to end the dominance of shareholder primacy within America’s largest public corporations—our biggest employers—is necessary in order to build sustainable prosperity for all in the 21st century. It is time we rewrite the rules that govern corporate behavior.