Within hours of final passage of the Tax Cuts and Jobs Act in the U.S. Congress, U.S. businesses began announcing wage increases, bonuses and investments. The first overhaul to the U.S. tax code in more than 31 years will slash the corporate tax rate from the highest in the developed world to 21%, a policy data show does boost wages.
AT&T was first to announce it would pay bonuses of $1,000 to more than 200,000 U.S. employees in response to tax reform. The telecommunications giant previously said it would invest $1 billion in the U.S. if “competitive” tax reform was passed, and that the Tax Cuts and Jobs Act would increase demand for their services.
AT&T said all union-represented and non-management employees, as well as front-line managers, will receive bonuses. They also announced that they will move forward with their plan to invest an additional $1 billion in the U.S. next year.
“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” CEO Randall Stephenson said in a statement. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”
The company will cut the bonus checks over the holidays if President Donald J. Trump signs the tax bill before Christmas, as he is expected to do. Democrats are threatening to shutdown the government if the bill is signed before Christmas, as it could trigger automatic cuts to domestic spending.
Fifth Third Bancorp (NASDAQ: FITB) based in Cincinnati, Ohio, followed up with an announcement that it will pay more than 13,500 employees a bonus and raise the minimum wage for its workforce to $15 after the passage of the president’s signature tax cut and reform plan.
“It is good for our communities, employees and Fifth Third Bank,” said CEO Greg Carmichael in a statement.
Fifth Third said the tax cut allowed it to reevaluate its employee pay and pass along some of the windfall. Nearly 3,000 workers will see hourly wages rise to $15.00, a noteworthy milestone. Leftwing protestors and supporters of the minimum wage have long-cited the marker as a “living wage,” but government coercion has had a negative impact on the labor market.
The $1,000 one-time bonus is expected to be paid by the end of this year if President Trump signs the bill by Christmas.
Boeing (NYSE: BA) also announced that it would invest/donate $300 million to causes that they say will benefit their employees ($100M corporate giving, $100 workforce development and another $100 for facilities). FedEx (NYSE: FDX) CEO Frederick W. Smith said tax reform will boost their profits by more than $1 billion. In return, they will expand, hire and boost wages.
UPDATE: Comcast just arrived to the party, too. Following shortly after, Wells Fargo.
“Based on the passage of tax reform and the FCC’s action on broadband,” Comcast is giving “special $1,000 bonuses to more than 100,000 eligible frontline and non-executive employees.”