Most Interesting Perspective of the Week

Since then, analyses from investment banks and researchers have estimated that 40 to 60 percent of the savings from the tax cut are being plowed into buybacks. One analysis of companies on the Russell 1000 Index—which consists of big firms, much like the Standard & Poor’s 500 does—found that companies directed 10 times as much money to buybacks as to workers. As such, Milani and Tung said they expect the math on corporate spending on shareholders versus workers to become even more exaggerated in the coming years.

In the meantime, corporate boards are poised to spend hundreds of billions more on their own shares, benefiting executives along with the mostly wealthy Americans who own stock. Just this week, Caterpillar, for instance, said it plans to spend $1 billion buying back shares in the latter half of this year, before kicking off a new $10 billion round on buybacks starting in January. It is also in the midst of laying off hundreds of workers.

ANNIE LOWREY is a contributing editor at The Atlantic, covering economic policy.