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3471Are we living in a new Gilded Age? Yeah, it sounds dramatic, but let me explain.
Picture this: CEOs and shareholders eating cake while the rest of us get, well… the crumbs.
That’s kind of the story here. Let’s break it down together.
A recent report from Oxfam took a close look at the 200 biggest U.S. corporations, and guess what they found?
Out of $1.25 trillion in profits, a whopping 90% went straight into the pockets of wealthy shareholders. That’s right—$1.1 trillion dollars, just for the top guys.
Meanwhile, CEO pay has jumped by 31% since 2018. If you’re thinking, “Wait, I thought we were struggling after the pandemic?” Yeah… exactly.
Taking a modern-century spin on “Let them eat cake,” shareholders are having the whole cake, and eating it too. It’s no shock the boardroom is able to stay above the fray as wealthy members are more equipped to weather economic downturns.
But it turns out CEOs and shareholders are walking away with an even greater slice of profits than one might think.
While companies like Meta were laying off thousands of people in the name of “efficiency,” they were also buying back billions of dollars in stock.
It’s like saying, “Hey, sorry folks, we gotta cut some jobs to save money.” And then, BOOM, $50 billion stock buyback announcement. Makes total sense… right?
Why have there been so many tech layoffs? This past year has been marked by layoffs in the finance, tech, and media sectors as many CEOs claim to need to downsize in light of economic strain.
But it seems as if corporations are doing better than ever. Revenue and profits at Fortune 500 companies grew significantly between 2014 and 2022, hiking even more in the years after the pandemic hit.
In the same breath that Meta’s Mark Zuckerberg announced layoffs for more than 10,000 workers in the name of a “year of efficiency,” the company announced a fresh $40 billion stock-buyback option. Less than a year later, Meta announced plans to buy back another $50 billion.
While money was seemingly tight for some, it was the equivalent of Christmas for those at the top: Stock buybacks in 2022 hit a record of $681 billion, per Oxfam.
The reality is, this isn’t just about business. It’s about power, about where the money is going. The rules are set up to benefit those already at the top.
Stock buybacks, CEO raises, lower taxes for corporations—it’s all part of the playbook that’s making the rich even richer.
And honestly, the numbers are staggering. Some CEOs, like McDonald’s CEO Chris Kempczinski, are making 1,745 times what their average workers make. Yeah, you heard that right—1,700+ times!
The consolidation of power at the top has been a decades-long process. The concept of shareholder primacy started to take hold in the 1970s, and by the 1980s, stock buybacks—once banned as a form of stock manipulation—became legal.
This allowed companies to inflate their stock prices. At the same time, corporate tax rates fell dramatically thanks to a series of tax cuts, first in the Reagan era and again during the Trump administration.
Corporations gained more influence in politics, especially after the 2010 Citizens United decision, which gave companies and wealthy individuals almost unlimited power to spend money on elections.
“All of those things together have created sort of this perfect storm by which companies have gotten bigger, corporate power is on the rise, and the benefits that they’ve accrued in profit they are funneling to a smaller number of people,” said Irit Tamir, senior director of Oxfam America’s private sector department.
And the other stakeholders—the workers—“are losing out.”
It’s not all doom and gloom, though. We are starting to see some changes. Unions are gaining some ground—and a big shoutout to the UAW and the Starbucks union for standing up.
It’s a small sign that workers aren’t just accepting things quietly anymore. People are starting to push back, and that’s powerful.
“There are some promising signs, but if we don’t continue down that path, we are already essentially in a new Gilded Age,” says Tamir, echoing President Joe Biden’s rhetoric on checking corporate power.
Look, even Oxfam’s report is clear on this: having all the wealth concentrated in fewer and fewer hands is not sustainable.
In the long run, it’s bad for everyone—even the ultra-rich. Just look at Dollar Tree; they had to shut down 1,000 stores. Turns out, when workers can’t afford to spend, it’s bad for business.
At the end of the day, having wealth in the hands of fewer and fewer people isn’t good for the economy. We need to keep our eyes open.
We need to support changes that make a real difference—whether that’s higher wages, better worker protections, or holding corporations accountable.
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