Only 17 companies have ‘showered their workers with bonuses’ thanks to Trump’s tax overhaul
President Donald Trump celebrated the Republican tax cut bill on Twitter, claiming that companies giving one-time bonuses because of the legislation. President Donald Trump has been celebrating the Republican tax bill since its passage last month, claiming that companies are “showering their workers with bonuses” thanks to the tax overhaul.
An analysis by CNN found that only 16 companies in the S&P 500 responded to the tax overall by raising wages, handing out bonuses, or improving benefits. That number rose by one late Tuesday afternoon after Southwest Airlines announced a $1,000 cash bonus.
Companies are giving big bonuses to their workers because of the Tax Cut Bill. Really great!# p #3_10 # ad skipped = true #
— Donald J. Trump (@realDonaldTrump) January 2, 2018# p #4_10 # ad skipped = true #
“It’s good marketing, but you don’t have a trend yet. It’s premature at this point,” said William Klepper, a management professor at Columbia Business School.
CNN noted Wells Fargo is spending only 5 percent of the company’s total tax savings on a wage hike and additional charitable giving.
“It’s a token compared with what companies are actually saving,” explained Jeffrey Sonnenfeld, senior associate dean at the Yale School of Management. “Where is the rest of the money going?”
Helaine Olen, a Washington Post contributor, explained why such pronouncements by a tiny fraction of companies should not be viewed as signs of a permanently changed economy.
“But bonuses are, by definition, an irregular, voluntary, often one-time event. They are not a firm commitment to better pay. A company can give them once and never give them again,” Olen explained.
“So why did companies make announcements timed to the tax bill?” Olen asked. “This is very likely a strategy to curry favor with a thin-skinned president known to like flattery. If so, it’s working.”