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Who is Left for Us to Honor on Labor Day?

I sometimes feel that it is a form of public mockery to keep honoring our country’s laborers when they

have been so vilified and marginalized in the last 30 years. I say this with real sadness and regret, but the

reality is that in 1982, then-President Ronald Reagan’s Securities and Exchange Commission removed

any limits on corporations’ ability to repurchase their own stock. This happened at the same time that

employers, made bold by Reagan’s destruction of the federal air traffic controllers’ union, began large-
scale union-busting. Stock repurchases then exploded during the 1990s, when the pay of corporations’

chief executives became linked to the rise in the value of their company’s shares. This allowed chief

executives to recieve almost 60% of their pay in stock options or stock awards. Thus, ordering one’s

company to use its earnings to buy back its shares reduced its capacity to research or expand, but

became a sure-fire way to boost an executive’s pay.

What this means is that wealth in the United States today comes mostly from reducing and slowing the

ability of businesses to invest in activities that produce growth. The purpose of the modern American

corporation has now become to reward large investors and top executives with income that once was

spent on expansion, research, training and employees (laborers). I hope the future will provide us with

the opportunity to again work together to restore a more socially beneficial, moral, and ethical purpose

for businesses by finally getting rid of the SEC rule that permits unlimited stock repurchases. In addition,

it would be good to again require corporations to have employee and public representatives on their

boards.

My guess is that you have already noted that it is only the luxury and dollar stores that are thriving,

that even German companies are out-competing ours. Why? Because over the past 30 plus years, the

wealth and income of our country has been redistributed from workers to investors, thanks mostly to

the elimination of regulations that protected our previously strong middle class of laborers. President

Lincoln’s words are worthy of another serious look in these days when he said, “Labor is prior to, and

independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not

first existed. Labor is the superior of capital, and deserves much the higher consideration.” (Lincoln’s

First Annual Message to Congress, December 3, 1861) And again, “Labor is the true standard of value.” (Speech at

Pittsburgh, Pennsylvania, February 15, 1861)