Over the past couple years, many on the left have been pushing for legislative action to increase minimum wage. Without passing any laws directly related to raising the minimum wage, this is now happening naturally. Certain companies have given bonuses to hundreds of thousands of employees and increased their minimum wages as a result of the GOP’s new tax plan. The law slashed the corporate tax rate to 21 percent from the current 35 percent and includes other measures Republicans claim will incite businesses to invest domestically. President Trump praised the bill and corporations’ subsequent actions, calling it “an extraordinary victory for American families, workers, and businesses.”
AT&T quickly responded to the news of the reform, saying it would grant $1,000 each to 200,000 of its union employees nationwide, as well increase its capital expenditures by $1 billion, which it believes will increase demand for its services. The telecom giant’s CEO Randall Stephenson claims, “Congress took a monumental step to bring taxes paid by U.S. business in line with the rest of the industrialized world. This tax reform will drive economic growth and create [well]-paying jobs.”
Comcast took similar action, offering $1,000 bonuses to over 100,000 employees not in executive positions as a result of both the tax reform and the FCC’s action on broadband. The company also committed to spending at least $50 billion in the next five years on improving its broadband plans, television and film production and theme parks.
As a result of the tax cut, Fifth Third Bancorp was able to re-evaluate its employee pay and pass along the good fortune. It announced a $15 minimum wage for its workers and one-time $1,000 bonuses to more than 13,500 employees, from which senior managers and top executives will be excluded. “It is good for our communities, employees and Fifth Third Bank,” states CEO Greg Carmichael. “We want to invest in our most important asset – our people. Our employees drive our reputation, our business, and our success.” Carmichael said the higher wage is an important step to help support individuals, their families and the communities in which the bank operates.
Former CKE Restaurants CEO Andy Puzder, who withdrew his nomination as Trump’s labor secretary, told CNBC, “You’re seeing an increase in wages for people, which is what we haven’t seen since the end of the recession.” In a different interview, he said, “This is a big deal, and I think people are going to see that in the coming months.” While he doesn’t believe the fast food industry will see the same $15 minimum wage hike, he does expect workers will see “bigger checks next year.”
Despite these actions taken to support employees, some continue to question whether they will be enough to prove the tax plan benefits American workers. Democrats still express concern over the plan being a “giveaway to corporations at the expense of the middle class,” and the potential to add over $1 trillion to the federal deficit over the next decade. Puzder recognizes the plan could have been improved had there been bipartisan support in Congress, but claims those who oppose the plan for its favor of the wealthy over the middle and lower classes likely haven’t read the legislation thoroughly.
Sam Lundry • Jan 8, 2018 at 4:34 pm
You cannot claim that wages are increasing because a few companies decided to give relatively small bonuses to their employees. You give no actual evidence to support your claim that “wages rise under new tax plan.” Instead, you quote a single (very conservative, former Trump nominee who withdrew his nomination because he couldn’t get the most conservative Senate in decades to confirm him) CEO saying that *THINKS* people will see wages increase in the coming months after falsely claiming that wages haven’t risen since the recession. You can see wage growth here:
https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx?panel=1
During the recession, wage growth plummeted. Following the recession, during Obama’s term, wage growth steadily rose from a low of 1.6% in January 2010 to a high of 3.9% in November 2016. Donald Trump was elected in November 2016, and as you can see clearly from the graph, wage growth has stagnated since then. Puzder’s claim is wrong.
Also, at the same time AT&T and Comcast were giving measly bonuses to their employees, they were laying off hundreds of them right before Christmas.
http://www.chicagotribune.com/business/ct-biz-att-layoffs-20171222-story.html
http://www.newsweek.com/comcast-fired-500-workers-christmas-after-pledging-give-employees-1000-bonuses-771789
It turns out that the bonuses were not given because these companies love their employees so much and are excited to invest in them following a huge tax cut, but because announcing the bonuses now allows them to deduct the money from this year’s taxes before the new tax laws are implemented, saving them millions.
http://fortune.com/2017/12/22/att-bonuses-could-save-millions/
I’m not going to attempt to argue that companies won’t use the money they will save from the tax cut to help their employees and boost business. However, this tax bill was pushed through with no imput from the American people and no time to accurately score its economic ramifications. The bill also explodes the federal deficit and Republicans will use this as an excuse to take money and services away from the poor and vulnerable in this country. While some may be seeing benefits now, Republicans will attempt to slash healthcare and social security in the future and will use the mess they’ve created to justify it.
It’s also important to understand how this tax bill does favor the wealthy and large corporations. I’ve located the most unbiased source there is, PBS News, who explains the details.
https://www.pbs.org/newshour/politics/new-gop-tax-agreement-favors-businesses-wealthiest-earners
It would have been great to be able to cite an official CBO score of the bill to assess the ramifications of this legislation, but unfortunately since Republicans pushed the bill through so quickly we don’t have that. So we must rely on a third party.