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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.