The money to support well-paid American jobs exists—it’s just being hoarded at the top. Economist William Lazonick argues that this is not just unfair; it’s a failure of the whole economic system.
For the last 40 years, millions upon millions of hard-working Americans have been clocking in, doing their part — and getting less in return. They are very upset, as well they should be. Wages have stalled. Job security’s a joke.
Yet corporate profits are sky high.
Just look at the scoreboard: In 2024, Apple raked in $93.7 billion, Alphabet (Google’s parent company) pulled in $100.1 billion, and ExxonMobil reaped $33.6 billion. Yet the workers powering these companies aren’t seeing much of the immense value they have created. Some of Alphabet’s contract workers only recently fought their way up to $14.50 an hour. That’s not even close to a fair share of over $100 billion in profit.
So where’s the money going?
As economist William Lazonick, an expert on the American business corporation, points out, it’s not going to the people creating the value. It’s going into stock buybacks, dividends, bloated CEO pay, and the war chests of hedge-fund activists. In 2024, Apple did $94.9 billion in buybacks, Alphabet $62.2 billion, and Exxon Mobil $19.6 billion. These big productive companies aren’t struggling—they’re thriving. But instead of reinvesting in workers or society, they’re juicing their stock prices and enriching the top.
Just look at General Motors (GM), where the United Auto Workers (UAW) staged a major, large, successful strike in September 2023—only to have GM do $11.1 billion in stock buybacks in 2023 and $7.1 billion in 2024. Instead of using that money to pay workers better or invest in things that would actually help the company grow—like new equipment, research, training, or EVs—the company spent it buying back its own stock in order to push up the stock price and make shareholders and top executives richer.
Most workers don’t realize how much is quietly being siphoned away. They might blame globalization—and sure, it’s part of the story—but they often miss the issue that tariffs won’t touch: executives using Wall Street tricks to pocket profits that should’ve gone to the workers who earned them and helped make the profits possible.
Tariffs promise to bring back well-paid jobs, but they ignore the core problem: even the jobs we do have, in some of the most profitable industries, still aren’t paying what they should—and haven’t for decades. And it’s not because the money isn’t there—it’s because of where it’s going. As Lazonick notes, “UAW leader Shawn Fain has been supportive of Trump’s tariffs — but what he and his members should be railing against is the $18.2 billion that GM spent on stock buybacks in 2023 and 2024.”
Lazonick points out that it wasn’t always like this. In the mid-20th century, many American jobs came with decent pay, benefits, and social support for upward mobility—though, of course, those gains were mostly reserved for white men. Still, back then, wages rose with productivity. When companies did well, workers shared in the success. And corporations and the wealthy accepted high tax rates that helped educate the labor force. That link is now broken, largely because companies have been allowed to get away with playing Wall Street games that short-change workers.
Lazonick brings up an idea from economist William Baumol’s 2012 book The Cost Disease: Why Computers Get Cheaper and Health Care Doesn’t. Baumol pointed out something interesting: industries that produce goods—like factories making computers—can boost productivity over time, which helps lower costs. But service-based industries—like education and health care—don’t really have that option. A teacher still needs to spend about the same amount of time teaching a class, and a doctor still needs time with each patient. Even though they can’t speed things up the way machines in factories can, these workers still need to be paid competitive wages. That’s what drives up costs in services over time, and it’s what Baumol called the “cost disease.”
Not to worry, said Baumol. Our society can afford the education and health care we need by transferring the profits from the goods producers (such as Apple, Alphabet, and Exxon Mobil) to fund social services. But, as Lazonick points out in a forthcoming INET working paper on goods and services in the U.S. economy, the high profits of the goods producers have been funneled into buybacks and dividends that make the rich richer, who then transform their economic might into political power to demand even lower taxes. Meanwhile, most Americans experience deteriorating social services—which, with the Republicans in control, are now on the chopping block.
The result of extreme corporate financialization is that even in high-productivity sectors like manufacturing and tech, wages lag behind. Companies are more productive and profitable than ever, but the gains are being concentrated at the top. Take a new chip or drug—costly to develop, cheap to mass-produce, and easy to sell worldwide. That’s the promise of scalable tech: big profits with low unit costs. It’s paying off—just not for most workers.
So what should those profits be doing? Lazonick argues that in a healthy economy, the incredible profits generated by high-productivity companies shouldn’t be used to do buybacks and flow to shareholders—they should be reinvested in the productive capabilities of the labor force and in the provision of the high-quality social services that we all need.
That means paying workers their fair share and funding essential services like education, health care, public safety, environmental protection, and the arts—most of which aren’t, or shouldn’t be, driven by profit (though private equity companies are trying to squeeze profits out of them). Lazonick, building on Baumol’s insight, points out that we have the economic capacity to support all of this—the real question is, do we choose to? Because the point of an economy isn’t just to provide jobs so people can scrape by. It’s to raise living standards for everyone and ensure that prosperity is shared.
That’s why profitable companies should be sharing more of the gains with their employees. And that’s why the country needs a fair corporate tax rate. As Lazonick argues: “That’s where you get the money — you recognize those corporations are actually living off society, and they need to pay their workers more and pay their taxes so that we can give everybody the services that make life worth living and, by the way, keep the economy productive.”
And here’s the political punch: when people feel secure — when they have decent jobs, health care, and a future — they’re less likely to fall for fear-based politics. A fair economy supports a healthy democracy — which, Lazonick notes, is why people who are not interested in a fair economy don’t actually want people to feel secure.
The bottom line is that as long as we stay locked into shareholder value ideology — where boosting stock price is all that matters — American workers will keep losing ground, and our overall quality of life will keep slipping. Lazonick notes that this deeply flawed mindset, popularized in the ‘80s when “greed is good” became Wall Street’s mantra, continues to dominate corporate boardrooms despite being exposed as a failure that ruins the long-term value of companies, fleeces workers, and harms society. It still goes largely unchallenged, even by many Democrats, who need to confront practices like stock buybacks head-on if they’re serious about improving American job quality.
Lazonick’s core message is straightforward: those massive corporate profits are not just private gains. They’re built on public investment and worker productivity. Taxpayer-funded research, public infrastructure, and a trained labor force all make them possible. So when companies play Wall Street games with profits and hoard rewards only for the top, it’s not just unfair—it’s a failure of the entire economic system.
For decades, workers have been told to tighten their belts, work harder, and wait for the gains to trickle down. But the gains already happened—they’re just going elsewhere, and tariffs won’t fix it. If we want an economy that actually works, we need to remember what it’s for: not just growth, but shared prosperity. Not just jobs, but better lives.
The money is there. And a big chunk of it is rightfully ours.
