Morris Pearl: Stock buybacks, not wages, surge one year after tax cuts

The Tax Cuts and Jobs Act was marketed as a middle class tax cut that would promote higher wages. Almost a year after its passage, stock buybacks have soared while wage growth has remained stagnant.

During the first half of this year, a whopping $384 billion was spent on stock buybacks. Stock buybacks, which happen when a company repurchases its own shares from the market, are basically another way for a company to payout its increased profits to its owners and give its remaining investors greater relative ownership of the company’s earnings. It’s simply another way to give money back to investors without the company losing value, and does nothing for the workers. So, unsurprisingly, during the same period, wage growth was far under the expectations of economists.