In 1967, Martin Luther King Jr. said: “We must rapidly begin the shift from a ‘thing-oriented’ society to a ‘person-oriented’ society. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism and militarism are incapable of being conquered.”
American business used to be about people. It used to be about quality products and investment in long-term growth for employees, consumers and shareholders. But when large, profitable corporations like McDonald’s, General Electric, ExxonMobil and General Motors put stock-rigging maneuvers that enrich already wealthy hedge funds and executives ahead of everything else, we’re left with a morally unjust economy that shortchanges everyone else.
With guiding principles like these, it’s no wonder then that since 1973, the bottom half of society has been stuck in poverty while the average CEO makes 350 times more than the people working for them. Since 2009 through the end of last year, the largest U.S. companies spent $2 trillion buying back their own stock – with a record $940 billion spent in 2014 alone.
Over the last decade, McDonald’s – a company that has become the poster child for low-wage employers – has spent $30 billion buying back its own stock, equivalent to 65% of its profits. That’s money that could have gone to workers, who get paid rock-bottom wages, instead of making a quick buck for the fast-food giant’s investors and appeasing Wall Street.
We’re marching on McDonald’s shareholder meeting this week – with workers and other clergy from all over the country – because it’s morally unacceptable that companies like McDonald’s binge on share repurchases each year, concentrating wealth among a select few while the workers who are building that wealth live in poverty.
Since fast-food workers joined hands together two and a half years ago and swept the country with their fight for a living wage, we are now at the precipice of a national turning point. We must keep pushing. If we do, we can win a better life for all: fair wages, quality education, affordable healthcare, respect for workers and their families and the right to form a union without fear of retaliation or interference.
It’s a sign of this turning point when even big players on Wall Street recognize and stand up against the devastating impacts of share buybacks. Last month, Laurence Fink, the CEO of BlackRock – one of McDonald’s largest shareholders, sent a letter to the 500 largest U.S. companies urging them to end an over-reliance on share buybacks. “The effects of the short-termist phenomenon are troubling both those seeking to save for long-term goals such as retirement and for our broader economy,” Fink said.
In a recent Harvard Business Review article, University of Massachusetts Lowell Professor William Lazonick wrote that buybacks at companies like McDonald’s are holding back our economy. “Buybacks are a major cause of U.S. income inequality, contributing to both the concentration of income among the richest households and the disappearance of middle-class jobs,” he wrote. “At a company like McDonald’s, franchisees and workers have a common interest in reducing the power of the corporation to distribute cash to shareholders so that a larger share of corporate profits can be allocated to the people who are actually generating the company’s revenue on a daily basis.”
Our political leaders are waking up to this reality. Sen. Tammy Baldwin has demanded that the Securities Exchange Commission reassess their rules for share buybacks because there’s overwhelming evidence that these financial maneuvers hurt wages and jobs. Fair wages, labor practices and civil rights are the moral issues of our time. As Dr. King said, “true compassion is more than flinging a coin to a beggar. It comes to see that an edifice which produces beggars needs restructuring.”
The forces of change are piling up against extreme corporate excess. If McDonald’s spends billions of dollars buying back its own stock to grow executives’ coffers and pad hedge fund investors’ pockets, the company must have the money to pay its workers $15 an hour so that workers can support their families without relying on food stamps.
It’s time we had an economy that works for people who work for a living, who want to sit with their families and enjoy dinner on Sunday. A society that’s people-oriented. It’s time companies like McDonald’s invest in their workers and end a reliance on share buybacks and other maneuvers that strip down the middle class and only serve the fleeting interests of the wealthy.
The Rev. Dr. William Barber II is pastor of Greenleaf Christian Church in Goldsboro, North Carolina, and architect of the Moral Mondays Movement, a grass-roots movement for racial and economic justice. The Rev. Dr. Rodney Williams is pastor of Swope Parkway United Christian Church in Kansas City, Missouri. The Rev. Marilyn Pagán-Banks is executive director at A Just Harvest in Chicago, Illinois.