Senate Minority Leader Chuck Schumer and Sen. Bernie Sanders (I-VT) are teaming up to put a spotlight on corporate stock buybacks and push forward the idea that in order for companies to reward their shareholders, they should have to reward their workers and communities first.

Schumer and Sanders penned an op-ed in the New York Times on Sunday laying out the case for reining in corporate stock buybacks — a process in which companies buy back their own shares from the broader marketplace. The pair said they plan to propose legislation that would bar companies from buying back their own stock unless they do other things first, such as paying their workers at least $15 an hour, providing seven days of paid sick leave, and offering “decent pensions and more reliable health benefits.” The details of the legislation are still taking shape.

Corporate stock buybacks have been on the rise for years. From 2007 through 2016, S&P 500 companies distributed $4.2 trillion to shareholders through buybacks and an additional $2.8 trillion through dividends, totaling $7 trillion in shareholder payouts. And the 2017 Republican tax bill that cut the corporate tax rate from 35 percent to 21 percent exacerbated the trend: US companies spent a record $1 trillion on buybacks in 2018, according to the investment research firm TrimTabs.

For Democrats, highlighting stock buybacks may be a wise political choice. It’s a concrete way to talk about wealth inequality and corporations and rich people continuing to profit while many Americans are left behind. It’s also a way to continue to weaponize the tax bill and make the case that its benefits went largely to the top income bracket. And, Sanders — a progressive independent who may run in the Democratic primary for president in 2020 — teaming up with the Senate minority leader on this issue is a big deal.

“Corporate America has cashed in on the Trump tax bill, but working America has been left behind,” Schumer said in a speech on the Senate floor on Monday.

Schumer and Sanders basically want companies to help workers before they reward shareholders

In essence, Schumer and Sanders are saying that before companies buy back their stock, they have to do something for workers first — pay them more, give them better benefits, make sure their pensions are funded.

“It’s great to see both Schumer and Bernie taking this on, and I think it’s representative that it’s common sense that when businesses are doing well, workers should do well too,” Lenore Palladino, a senior economist and policy counsel at the Roosevelt Institute think tank, told me.

The plan’s outline thus far appears to have some similarities to the Stop WALMART Act that Sanders rolled out last year alongside Rep. Ro Khanna (D-CA), which would prohibit large employers from buying back stock unless they pay workers $15 an hour, ensure seven days of sick leave, and ensure CEO compensation is no more than 150 times the median pay of all employees. But the exact details of the legislation are not yet clear, and Schumer and Sanders say a bill is coming soon.

In a Facebook Live video on Monday evening, Schumer and Sanders discussed their proposal. (Beyond stock buybacks, the pair also talked a bit about their alma mater, James Madison High School in Brooklyn, and the video is honestly a delight to watch.)

Sanders specifically cited the Walton family — the heirs to the Walmart fortune and collectively the richest family in the United States.

“Despite their extraordinary wealth, what we’re seeing all across this country [is] Walmart workers being paid wages that are very, very low,” Sanders said, later adding, “What Chuck and I are saying is you’re doing just fine right now. Why don’t you start paying attention to the workers who are not doing so well?”

Even though details are still light on what their proposal, Schumer and Sanders are already creating buzz.

Liberal economist Robert Reich tweeted that the plan would be a “huge step towards reining in stock buybacks.” Jared Bernstein, who served as chief economist to Vice President Joe Biden, tweeted that the Schumer-Sanders proposal is a response to rising inequality, weak corporate investment, and the fact that the tax cuts boosted buybacks more than it did worker pay and corporate investment. He also commended Democrats for going after the issue.

No, this isn’t going to be legislated in this Congress. But the D’s are doing exactly what they should be: showing the electorate an alternative agenda targeted at the disparities Trump ran on addressing but is only deepening. [end] — Jared Bernstein (@econjared) February 4, 2019

The proposal also has its detractors. David Santschi, the director of liquidity research at TrimTabs, the investment research firm, told CNBC that a major slowdown in buybacks “would have a significant impact on markets.” Former Goldman Sachs CEO Lloyd Blankfein weighed in on the matter on Tuesday and asked whether buybacks are really that bad.

A company used to be encouraged to return money to shareholders when it couldn't reinvest in itself for a good return. The money doesn't vanish, it gets reinvested in higher growth businesses that boost the economy and jobs. Is that bad? https://t.co/sxfcmve0DA — Lloyd Blankfein (@lloydblankfein) February 5, 2019

A lot of Democrats are looking at buybacks

Schumer and Sanders aren’t the only lawmakers looking to take action on stock buybacks — the issue has been percolating on the left for a while.

Sen. Tammy Baldwin (D-WI) has for quite some time taken an interest in stock buybacks. She’s written letters to former Securities and Exchange Commission Chair Mary Jo White and current Chair Jay Clayton asking them to take a look at buyback rules, and in March 2018, she introduced the Reward Work Act, which would make stock buybacks more transparent by requiring they be conducted through tender offers, through which a company would offer to purchase shares. They’re subject to more disclosure requirements than open-market purchases. Sens. Elizabeth Warren (D-MA), Brian Schatz (D-HI), and Kirsten Gillibrand (D-NY) signed on as co-sponsors of the bill.

Sens. Cory Booker (D-NJ) and Bob Casey (D-PA) also introduced the Worker Dividend Act, which would require companies buying their own shares to pay out to their own employees, too. Booker told Vox’s Matt Yglesias that he sees the bill as a “commonsense move to address a variety of ills.”

Schumer, who last year alongside Baldwin proposed an amendment on stock buybacks to the Senate banking bill, acknowledged on the Senate floor on Monday that this latest proposal is one of many out there from Democrats.

“We all believe that this Congress, this Senate, should vote on legislation that demands that corporations commit to addressing the needs of their workers and communities before the interests of wealthy shareholders,” he said.

Palladino, from the Roosevelt Institute, warned that buybacks are just part of the problem when it comes to addressing wealth inequality and the ills of corporate America.

“Reforming buybacks is completely necessary and also completely insufficient,” she said, noting that labor unions, corporate governance, and tax law need attention as well.

Why you should care about stock buybacks

Stock buybacks were relatively uncommon until the Reagan administration, when the SEC changed the rules governing them to allow companies to engage in buybacks as long as they stick to certain parameters that are pretty forgiving. (I have a full explainer on buybacks, including the history of and debate about them.) Since then, they’ve taken off: Over the past 15 years, firms have spent an estimated 94 percent of corporate profits on buybacks and dividends.

Stock buybacks aren’t necessarily inherently bad all of the time. Proponents say they put money back into the economy and may lead to a rise in stock prices, which can have a marginally positive effect on consumer confidence and consumption. And maybe a company’s shares are really cheap and the company has nothing better to do with its money. But in other instances, companies could be spending elsewhere, such as worker pay or business investments.

Especially after the tax bill, prioritizing stock buybacks over more productive spending isn’t a good look: While companies spent a record amount on stock buybacks last year, a recent survey from the National Association for Business Economics found that the tax cuts had no major impact on businesses’ capital investment or hiring plans.

A number of big-name corporations announced stock buybacks after the GOP tax bill passed in 2017. Apple, which has also made announcements on the corporate investments front, said it would buy back $100 billion of its shares after the tax cuts. Harley-Davidson in February 2018 announced a nearly $700 million stock buyback plan just days after saying it would close a plant in Kansas City. Wells Fargo is spending $25 billion on buybacks and is at the same time laying off workers in multiple states.

That’s the type of behavior Schumer and Sanders are hoping to curb. “Unless the company does something for the workers … they can’t do buybacks, plain and simple,” Schumer said during Monday’s Facebook Live.

RIGHT NOW: I’m sitting down with U.S. Senator Bernie Sanders. The past two years have been extremely disappointing for millions of workers. We’re pushing legislation that demands that corporations address the needs of their workers before their wealthy stockholders. Posted by Senator Chuck Schumer on Monday, February 4, 2019

But beyond the specifics of the tax bill, buybacks tell a story about the broader problem of wealth inequality in America. According to Gallup, just over half of Americans own stocks at all. The richest 10 percent of Americans own 80 percent of all stock shares, while the bottom 80 percent of earners own just 8 percent. In other words, rich people benefit a lot more from stock buybacks than your average worker with a 401(k).

And even more specifically, corporate executives and insiders are among the biggest winners here. Executives often take the opportunity to sell shares of the companies they run when buybacks are announced and therefore profit off them. SEC Commissioner Robert Jackson last year unveiled research showing how common it is for executives to use buybacks to cash out of their stocks. His team looked at 385 buybacks since the start of 2017 and found that in half of them, at least one executive sold shares in the month following the buyback announcement.

Sanders on Monday zoomed out of the buyback conversation to talk about what it means to what he called the “fraud” theory of trickle-down economics and the idea that policies that benefit those at the top will eventually reach the rest of the country. “This takes us to the broader issue of the grotesque level of income and wealth inequality in this country,” he said.

With Republicans still in the majority in the Senate, it is unlikely the stock buyback legislation Sanders and Schumer eventually propose, or the other ideas to rein in buybacks out there, will become law in the near future. But Democrats are talking about it, and the pressure for action could start to ratchet up.

The news moves fast. Catch up at the end of the day: Subscribe to Today, Explained, Vox’s daily news podcast, or sign up for our evening email newsletter, Vox Sentences.