2017-12-23 — usatoday.com
After Congress passed the sweeping tax cuts Wednesday, AT&T and Comcast said they would award one-time $1,000 bonuses to a total of more than 300,000 non-management employees. Wells Fargo and Fifth Third Bancorp said they'll raise their base pay to $15 an hour. Wells Fargo also is setting aside $400 million for charitable donations next year and 2% of its after-tax profit for philanthropy in 2019, while Fifth Third is tossing in a $1,000 bonus for workers. Boeing is moving ahead with $300 million in investments, including $100 million in corporate giving.
The companies were largely responding to widespread skepticism that the tax cuts would trickle down to workers and the broader economy. Under traditional economic theory, the companies would use their tax savings to buy labor-saving technology that increases each worker's output, allowing the firms to fatten paychecks in several years.
But is it a coincidence the companies that quickly announced plans after the tax bill passed have received presidential scrutiny?
President Trump has opposed AT&T's $85 billion deal to buy Time Warner, saying it's "not good for the country" because prices are likely to go up. The Justice Department is suing to block the merger. The president also has taken aim at Wells Fargo with a tweet that suggested the bank, which has been dogged by a fake accounts scandal, could see its penalties "substantially increased." And Trump, as president-elect, was critical of Boeing and threatened to cancel a deal for a new Air Force One due to cost concerns. The president also blasted Comcast/NBC Universal on the campaign trail for "trying to poison the mind of the American voter."
"It is interesting to note that the tidal wave of such announcements are from employers under the gun from government scrutiny and which have been specifically targeted by the president," Jeffrey Sonnenfeld, a professor of leadership at Yale School of Management, told USA TODAY.
The sweeteners are unlikely to have any noticeable impact on the economy, economist Chris Lafakis of Moody's Analytics says. "If the majority of U.S. small businesses and corporations all did this it would have a meaningful impact" on growth, he says.
You've gotta hand it to Trump: he uses his bully pulpit (and pretty much nothing else) -- but are relative peanuts scattered to a distinct minority of workers one-time going to do enough to improve the lot of the middle class and working poor that they send Repubs back to power?
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