Fact-checking Mark Warner and Luis Gutierrez: PolitiFact covers the conventions

By Louis Jacobson, PolitiFact senior correspondent

PHILADELPHIA — A parade of political notables addressed a Florida delegation breakfast on July 27 that proved considerably quieter than the raucous gathering two days earlier, when pro-Bernie Sanders protesters drowned out Rep. Debbie Wasserman-Schultz, D-Fla. PolitiFact was in the house, and we found statements to check by Sen. Mark Warner, D-Va., and Rep. Luis Gutierrez, D-Ill.

Warner — a former entrepreneur and CEO — mounted an attack on the current state of American capitalism, saying it is too tilted toward benefiting the few.

“I think we need to acknowledge that modern American capitalism, the way it’s playing out in 2016, is not working for enough Americans,” Warner said. “We see a free enterprise system that used to create jobs being dramatically changed. Thirty years ago the average time somebody held a public stock was eight years. Today it’s four months.”

Warner’s point was that too many Americans are flipping stocks for a quick profit without staying in the market for the long term, which can allow companies to grow in a more sustainable fashion.

PolitiFact Virginia recently checked a similar assertion by Warner and found it largely accurate. However, Warner used a slightly different time frame during his appearance in Philadelphia, making his talking point somewhat less correct this time.

Warner’s office sent PolitiFact Virginia a variety of articles by academics, investment strategists, newspapers and magazines that contained similar statistics to the ones cited by the senator. The source of the historic data was the New York Stock Exchange which, for most of the 20th century, was the dominant U.S. stock-trading venue.

Here’s the NYSE’s average holding period for stocks at the start of each new decade:

•1960, eight years, four months;

•1970, five years, three months;

•1980, two years, nine months;

•1990, two years, two months; and

•2000, one year, two months.

When PolitiFact Virginia previously checked the claim, Warner referred to the 1960s specifically, when the typical holding time was indeed eight years. However, this time, Warner said 30 years ago — and back then, the figure was somewhere between two and five years. (Another complication: Many new trading venues have opened and expanded in recent decades — E*Trade and NASDAQ, for example — and the New York Stock Exchange’s dominance has diminished.)

As for more recent data, Credit Suisse figures show that in 2008 and 2009, when the nation was mired in the Great Recession, shares turned over an average of almost five times a year. That slowed to about three times a year since 2013 or, as Warner put it, once every four months.

As part of the same riff, Warner said that “25 years ago, when corporations made money, 50 percent of corporate profits plus were reinvested in jobs, in infrastructure, in plant. Today 95 percent of corporate profits are used for stock buybacks and dividends. That’s not long-term value creation.”

We couldn’t find data on this question, but Warner’s staff provided a September 2014 Harvard Business Review report. It included data on the 449 companies in the S&P 500 index that were publicly listed from 2003 through 2012. “During that period, those companies used 54 percent of their earnings — a total of $2.4 trillion — to buy back their own stock, almost all through purchases on the open market. Dividends absorbed an additional 37 percent of their earnings. That left very little for investments in productive capabilities or higher incomes for employees.”

Warner’s staff also cited a November 2015 Reuters analysis that showed that “almost 60 percent of the 3,297 publicly traded, non-financial U.S. companies Reuters examined have bought back their shares since 2010. In fiscal 2014, spending on buybacks and dividends surpassed the companies’ combined net income for the first time outside of a recessionary period, and continued to climb for the 613 companies that have already reported for fiscal 2015.”

Warner also said at the breakfast that “35 percent of Americans are in some kind of contingent status — independent contractor, part time — trying to cobble together two or three jobs to make ends meet.”

We couldn’t find data on this question either, but Warner’s staff provided an August 2015 study by Intuit that said in part, “The rise of the on-demand economy is part of a broader long-term growth trend in the contingent workforce, which has grown from 17 percent of the U.S. workforce 25 years ago, to 36 percent today, and is expected to reach 43 percent by 2020.”

It’s worth noting that the definition of what makes a “contingent” worker varies, and that can affect the figures.

According to an April 2015 study by the Government Accountability Office, “The size of the contingent workforce can range from less than 5 percent to more than a third of the total employed labor force, depending on widely-varying definitions of contingent work.”

This is an issue of special interest to Warner. He made efforts to push the Labor Department to reinstitute a survey of contingent workers that had lapsed in 2005, and it apparently paid off in January when the department announced that it would re-start the survey.

As for, Gutierrez, a leading Latino congressman and an advocate for overhauling the nation’s immigration system, he offered breakfast attendees a demographic data point.

“There are a million people like my Mom and Dad, from Puerto Rico, in the state of Florida,” he said.

We found that his number is solid. According to a Pew Research Center analysis of Census Bureau data, the number of Hispanics of Puerto Rican origin living in Florida “has surpassed 1 million for the first time … more than doubling the state’s Puerto Rican population over the past 14 years.” The center cited 2014 data.

Here’s a graphic showing how quickly Florida has closed in on New York state.

Warren Fiske of PolitiFact Virginia contributed to this report.

Louis Jacobson is covering the 2016 Republican and Democratic national conventions for PolitiFact on Medium as part of a grant from the Knight Foundation.