A Partial List of Companies That Definitely Could Have Afforded to Pay Their Employees a Good Wage at Any Point Before the GOP Tax Bill
LatestSince the passage of the GOP’s wildly unpopular and regressive tax bill, American companies have been coming out of the woodwork to announce they are using their tax windfalls to invest in their employees. Even nominally “liberal” companies like Apple and Starbucks have credited Congressional Republicans and the Trump administration for finally giving them the ability to invest more in their workers.
Conservative politicians and commentators have fervently latched onto these stories as evidence that Trickle-Down Economics Works. But if you look beyond the press releases, the idea that these companies are handing over a significant portion of their tax windfall to their employees quickly becomes laughable.
America’s CEOs have openly admitted they wouldn’t spend any meaningful portion of their tax handout on their employees. At the Wall Street Journal’s “CEO Council” in November, White House economic advisor Gary Cohn asked for a show of hands from executives who planned to use their tax windfall on employee investments.
It didn’t go as he expected:
Conservative super PACs and Koch-funded groups have sunk tens of millions of dollars into convincing people that the tax bill is actually really good for peons such as them. As it turns out, American corporations are more than happy to do their dirty work for them.
Wells Fargo
The headline: In December, Wells Fargo pledged to raise their minimum wage for 25,000 workers from $13.50 an hour to $15 an hour.
The fine print: Analysts estimate the bank’s windfall from the GOP tax bill will be $3.7 billion—meaning the company is investing a little more than 2 percent of its tax gift in its own workers.
In 2016, Wells Fargo CEO Tim Sloan took in $12.9 million in executive compensation. Days before the bank announced its minimum wage hike, Sloan accidentally let slip what his company actually intended to use its tax windfall for: appeasing shareholders and share buybacks.
“Is it our goal to increase return to our shareholders and do we have an excess amount of capital? The answer to both is, yes,” Sloan told CNN Money. “So our expectation should be that we will continue to increase our dividend and our share buybacks next year and the year after that and the year after that.”
Hey, I believe you, Tim!
Bank of America
The headline: In December, Bank of America CEO Brian Moynihan announced the bank would give some employees $1,000 bonuses to celebrate the passage of the GOP tax bill. In a memo to employees, Moynihan praised the bill as “the most fundamental tax reform since 1986”:
In the spirit of shared success, we intend to pass some of those benefits along immediately. U.S. employees making up to $150,000 per year in total compensation – about 145,000 teammates – will receive a one-time bonus of $1,000 by year-end.
The fine print: In 2012, Moynihan received a 73 percent pay bump. In 2016, Moynihan made $20.2 million in cash and stocks. Bank of America recently announced it will start charging a $12 monthly fee to customers who don’t have at least $1,500 in their bank account, because they are evil.
I have an idea for Brian: what if you gave your employees a 73 percent pay bump—“in the spirit of shared success”? Could be a nice gesture!
JPMorgan Chase
The headline: JPMorgan Chase will give 22,000 employees an hourly wage bump and $750 bonuses, and says it plans to open 400 new branches in the next five years.
The fine print: The bank’s windfall from the tax bill is significantly higher than what it’s passing along to workers. JPMorgan Chase CEO Jamie Dimon estimates the tax cut will save his bank $3.6 billion—this year alone. By ThinkProgress’ calculation, that means the bank is passing just 1.8 percent of its tax savings onto workers.
JPMorgan Chase has traditionally been extremely generous to its C-suite employees. In 2016, Dimon received $28.2 million in executive compensation—a number that doesn’t fully seem real to me—making him the highest-paid bank executive in America. Again, all this occurred long before the GOP tax bill was introduced or passed. Jamie Dimon is basically Shirley Temple in Poor Little Rich Girl.
Fifth Third Bancorp
The headline: The regional bank pledged to raise its minimum wage to $15 an hour, as well as hand out one-time $1,000 bonuses to 13,500 of its 18,000 employees.
The fine print: Fifth Third Bancorp CEO Greg D. Carmichael received a 65 percent pay hike between 2015 and 2016—long before the tax bill was even a twinkle in Paul Ryan’s eye. In 2016, Carmichael made $7.5 million in cash and stocks—a paltry sum when in comparison to Wall Street executives’ salaries. Still, the Cincinnati-based banking corporation was clearly not hurting for revenue before the GOP tax cut, it just decided to allocate those profits at the top.
Disney
The headline: The happiest company on Earth announced it would give a $1,000 cash bonus to 125,000 employees.
The fine print: Of all the companies on this list, I can confidently say that Disney seems like the most miserable place to work. A union leader says the company is using the $1,000 bonuses as leverage in wage negotiations. In 2015, Disney laid off 250 employees, then wouldn’t allow the workers to access their severance packages until they trained their lower-paid replacements. Last year, the company charged its employees $3.8 million in back wages for costumes, violating federal labor laws.
Magical!
Starbucks
The headline: The coffee chain announced it will use $250 million of its tax savings to boost employees’ pay, stock and benefits.
“Investing in our [employees] has long been our strategy, and due to the recent changes in U.S. tax law, we are able to accelerate some significant [employee] investments,” Chief Executive Kevin Johnson said in a letter to employees.
The fine print: Johnson took in $11.1 million in corporate compensation in 2016. A Credit Suisse analyst estimated that Starbucks will save roughly $425 million with its lower global tax rate, meaning the company is investing roughly 58 percent of its tax cut in workers. That’s better than most of the companies on this list, but still not exactly a radical redistribution of wealth. How Starbucks will spend its remaining $175 million in corporate welfare is TBA.
AT&T
The headline: In December, the telecom giant announced it will give 200,000 employees a $1,000 bonus, supposedly as a result of the GOP tax bill:
In a statement, AT&T CEO Randall Stephenson hailed “Congress, working with the President” for taking a “monumental step” that will “create good-paying jobs.”
The fine print: AT&T is in the process of trying to acquire Time Warner in an $85 billion merger. Last November, the Department of Justice’s antitrust division sued AT&T to block the merger. Stephenson’s praise for the GOP tax bill one month after the feds blocked his company’s mega-merger smacks of corporate brown-nosing.
Stephenson is one of the highest-paid CEOs in the country. In 2016, he took in $28.4 million in corporate salary—a 13 percent pay bump from the prior year. By comparison, a senior customer service representative at AT&T makes an average annual salary of $22,900, according to Payscale. AT&T’s CEO makes 1240 times more per year than an AT&T customer service representative.
But sure, this multi-billion company couldn’t have afforded to give their employees a livable wage without the GOP’s tax cut.
Boeing
The headline: The aerospace titan announced it would allocate $300 million toward “employee-related and charitable investment” in the wake of the GOP tax bill: $100 million in corporate giving, $100 million in “workforce development,” and $100 million in “workplace of the future” enhancements, whatever that means.
Boeing CEO Dennis Muilenburg personally thanked Republicans in Congress and the Trump administration for having the courage to deliver a massive handout to America’s largest companies:
“On behalf of all of our stakeholders, we applaud and thank Congress and the administration for their leadership in seizing this opportunity to unleash economic energy in the United States,” said Muilenburg. “It’s the single-most important thing we can do to drive innovation, support quality jobs and accelerate capital investment in our country.”
The fine print: Last fall, Boeing made an incredibly risky bet using employees’ pensions as collateral by transferring $3.5 billion worth of stock into its pension plan. From The Motley Fool:
Rather than ease the risk associated with having such an unconscionable underfunding of its pension obligations, it’s quite possible that Boeing will instead crash and burn and take with it the value of its retirees’ benefits.
But hey, how about that workplace of the future?
Humana
The headline: The Louisville, Kentucky-based health insurance company announced it will raise the minimum wage for full-time and part-time employees to $15 an hour. (Weird how all of these companies seem to have almost identical wage/bonus numbers!)
The fine print: Between 2015 and 2016, Humana CEO Bruce Broussard received a $9.4 million pay hike, raising his salary from $10.3 million to $19.7 million. Despite posting $650 million in quarterly net income last summer, the company decided to give buyouts to 1,150 employees, and later laid off 1,300 more employees.
Thermo Fisher Scientific
The headline: The $86 billion biotech company announced it will give employees a one-time $500 bonus—a move that Thermo Fisher CEO Marc Casper credited to the GOP tax bill.
The fine print: Thermo Fisher employs roughly 65,000 employees. In 2016, Casper received $59 million in cash and stock compensation—enough to give each of his company’s employees $500 bonuses and still have $26.5 million in salary left over.
Thermo Fisher also reportedly paid no income tax in 2015, despite posting $1.9 billion in pre-tax profits that year. But sure, the GOP tax bill is the reason the company could afford giving a paltry one-time handout to its employees.
The list could keep going. Walmart, Apple, the Home Depot, Comcast, Verizon, PNC, US Bancorp, Nationwide Insurance, American Airlines, Southwest Airlines, JetBlue Airways, Fiat Chrysler, Sinclair Broadcast Group, and Washington Federal Bank have all made the same claims about one-time bonuses and other nominal investments in their workers—investments that they were apparently unable to hand out, despite years of soaring corporate profits and the plummeting labor share of those profits, until they were gifted additional billions of dollars by the Republican government. And those corporations and their executives will now shower similar gifts on the politicians who made this all possible.
Do you work at any of the companies on this list and have a workplace horror story to tell? Email us at [email protected].