Here are safeguards needed in bailout packages to protect working people and fight corporate greed
This week, Congress continues to negotiate a fiscal stimulus package to help ease the economic shock of the coronavirus. In these negotiations, it is critical that lawmakers establish strong conditions for industry bailouts. Working families, not just shareholders and corporate executives, must receive the benefits of any taxpayer-funded bailout.
Our economy is marked by extreme inequality. Chief executive officer (CEO) compensation has grown 940% since 1978, while typical worker compensation has risen only 12% during that time. From 1979 to 2018, the wages of the top 1% grew 158%, whereas the wages of the bottom 90% combined grew just 24%, less than one-sixth as fast. Extreme inequality and wage stagnation for virtually all but the highest earners for most of the last four decades have left fewer and fewer U.S. workers able to access the middle class. What Congress does now with this fiscal stimulus will either help address this inequality, or compound it and leave more workers behind.
Direct aid to impacted industries must be conditioned on meaningful protections for working people. These protections must include the following:
- Firms that receive taxpayer dollars must not be permitted to lay off workers, or to outsource or offshore work.
- Firms that receive taxpayer dollars must not be permitted to cut workers’ pay or benefits, or to reopen union contracts.
- Firms that receive taxpayer dollars should respect workers’ rights and must be required to remain neutral in any union organizing effort.
- Firms that receive taxpayer dollars should include workers on corporate boards.
- Firms that receive taxpayer dollars should limit CEO compensation.
- Firms that receive taxpayer dollars should be prohibited from stock buybacks.
We know from the 2009 bailout that firms will take advantage of government assistance. We can count on industries in distress to accept the bailout, even with these conditions. But, unlike the 2009 bailout, Congress must now ensure that working people—not just corporate executives and shareholders—benefit from the direct infusion of cash from the government. In the years following the 2009 bailouts, this group claimed a vastly disproportionate share of economic growth—finance became a larger as a share of the economy in 2011 than it was before the 2008 crisis. In contrast, the share of corporate-sector income claimed by employees’ pay hadn’t reached its pre-Great Recession peak even by the end of 2019. History has demonstrated that without strong conditions on any government financial assistance, corporate executives will line their pockets and those of their shareholders before providing for their workers.