Higher Pay and Bonuses Announced Before Tax Bill is Even Signed

Higher pay and bonuses announced within hours of passage of tax cuts. Image Source: Washington Examiner
Higher pay and bonuses announced within hours of passage of tax cuts. Image Source: Washington Examiner

NEW YORK (Reuters) – AT&T, Wells Fargo and Boeing were among American companies promising higher pay for workers or more investment in training on Wednesday after the biggest overhaul of the U.S. tax code in 30 years.

The Republican-controlled U.S. House of Representatives gave final approval to the tax bill on Wednesday, which cuts the corporate tax rate to 21 percent from 35 percent, and sent it to U.S. President Donald Trump for his signature.

Tax Cuts and Jobs Act Passes – Who Wins and Loses?

Republicans celebrate win on Tax Cuts and Jobs Act. President Donald Trump celebrated the tax bill's passage at the White House with members of the House and Senate on Wednesday, Dec. 20, 2017 during an event on the South Portico of the White House in Washington, D.C. Image Source: OLIVIER DOULIERY, ABACA PRESS

Republicans celebrate win on Tax Cuts and Jobs Act. President Donald Trump celebrated the tax bill’s passage at the White House with members of the House and Senate on Wednesday, Dec. 20, 2017 during an event on the South Portico of the White House in Washington, D.C. Image Source: OLIVIER DOULIERY, ABACA PRESS

The companies’ announcements gave at least some support to claims by Trump and fellow Republicans that their tax bill would lead to more investment by U.S. companies with the money they save.

AT&T, the No. 2 U.S. wireless carrier, said it will pay $1,000 bonuses to more than 200,000 employees and invest an additional $1 billion in the United States in 2018, once the tax reform bill is signed into law. An AT&T spokesman said the bonuses were unrelated to the $1,000 that 20,000 AT&T Mobility employees will receive as part of an agreement with the Communications Workers of America announced last week.

Employees eligible for the bonus are all “union-represented, non-management and front-line managers,” AT&T said in a statement. The company has more than 250,000 employees in all. The bonuses will cost the company at least $200 million, but the precise amount is not yet known, the company said.

Cable provider Comcast also said it would give $1,000 bonuses to more than 100,000 employees and invest $50 billion over the next five years in its infrastructure. Wells Fargo said the bank will hike minimum hourly pay to $15 an hour in March, up 11 percent from its previous minimum. It will also offer new restricted stock awards to 250,000 employees.

Regional U.S. bank Fifth Third Bancorp said it would raise the hourly wage for nearly 3,000 of its employees to $15 and give a one-time bonus of $1,000 to more than 13,500 employees, which its CEO said was made possible by the corporate tax cut.

The company said it expected to distribute the bonuses by year-end, assuming Trump signs the bill by Christmas – which is not certain – and that the pay increases would go into effect once the bill became law.

Aerospace company Boeing also said on Wednesday it would invest $300 million in workforce training and facilities enhancements for employees as its CEO lauded the tax bill.

REPUBLICANS PRAISE, DEMOCRATS DON‘T

Democrats, who opposed the bill, offered no congratulations. Senate Democratic leader Charles Schumer of New York criticized AT&T on the Senate floor.

“AT&T – big American company, fine American company – their tax rate over the last 10 years was a mere 8 percent, and they cut 80,000 jobs,” he said. “That one statistic belies all this trickle-down bunk that our Republican colleagues still cling to even though it’s outdated and disproven.”

Republican Senators, House Speaker Paul Ryan and Trump praised the announcements.

“Within hours of passing #taxreform, we’re already seeing announcements that companies plan to give back to their employees and invest more at home,” said Senator Shelley Moore Capito of West Virginia on Twitter. “Good news for workers and the economy!”

Author, Advocate, Blogger & Zombie Aficionado. Air Force veteran and jack of all trades, with a wide range of experience with many different cultures around the world as well as working alongside both CEOs and average Joes. “Writing was never a goal or even vaguely contemplated as a career choice, it just happened, an accidental discovery of a talent and a passion.” A passion that has taken him in many directions from history to zombies to advocacy to News especially in this day and age of “Fake News” and “Alternative Facts.” The Truth Is Out There!

About the Author

Jon Britton
Author, Advocate, Blogger & Zombie Aficionado. Air Force veteran and jack of all trades, with a wide range of experience with many different cultures around the world as well as working alongside both CEOs and average Joes. "Writing was never a goal or even vaguely contemplated as a career choice, it just happened, an accidental discovery of a talent and a passion." A passion that has taken him in many directions from history to zombies to advocacy to News especially in this day and age of "Fake News" and "Alternative Facts." The Truth Is Out There!

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