Are Worker Bonuses Promised As A Result Of The Tax Bill Just A PR Move?
ARI SHAPIRO, HOST:
While the tax bill is still waiting for the signature of President Trump, some companies wasted no time showing their enthusiasm. A handful say they are marking the occasion by giving some of their workers bonuses or higher wages. NPR's Alina Selyukh reports.
ALINA SELYUKH, BYLINE: Within hours of Congress passing the tax bill, President Trump gave a speech to praise it, and about 30 seconds in he called one company by name.
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PRESIDENT DONALD TRUMP: Two minutes ago, they handed it to me. AT&T plans to increase U.S. capital spending $1 billion and provide $1,000 special bonus to more than 200,000 U.S. employees. And that's because of what we did. So...
SELYUKH: And AT&T was not alone. Comcast is also giving out thousand-dollar bonuses and publicizing big investment goals. Boeing announced a plan to spend $300 million on employees and charitable donations. Two banks, Wells Fargo and Fifth Third, said they will raise their minimum wage to $15 an hour. The companies are saying this is a result of their pending tax cut reducing the corporate tax rate to 21 percent from the current 35.
QUINCY KROSBY: This started almost immediately. And I think you're going to see more companies doing it.
SELYUKH: Quincy Krosby is the chief market strategist for Prudential Financial. She says the companies will save a lot of money with a tax bill, and they're well aware that this is not particularly popular with Americans. So in a way, these announcements could help them get ahead of the headlines questioning how exactly that money will be spent.
KROSBY: They realize they've got a windfall. And they're in essence sharing it with their workers. They know that there's criticism regarding the tax bill. And what this does in their own way is going out and just giving back.
SELYUKH: Of course, worker advocacy groups dismiss all this as a big PR stunt. AT&T, for one, is facing a government lawsuit to block its merger with Time Warner, though the company says that has nothing to do with their announcement. Wells Fargo is still reeling from multiple scandals. But, also the bank's plan to raise its minimum wage may just be a recognition of reality.
IOANA MARINESCU: Might just be a good time to raise wages anyway no matter the decrease in corporate tax.
SELYUKH: Ioana Marinescu is an economist at the University of Pennsylvania. She says studies have shown that companies do share some benefits of a tax cut.
MARINESCU: Eighty percent of benefits on average remain in the pockets of the companies, and about 20 percent is passed on to workers.
SELYUKH: She says the announcements might be part of that 20 percent. And to Krosby, the important thing is that some workers are benefiting.
KROSBY: You could be cynical about it. You could - you can, you know, say it's just PR. But the fact is there will be workers who will get a little bit more in their pockets.
SELYUKH: Of course, a bonus is still income, and tax will be due. Alina Selyukh, NPR News.
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