On Friday, former Treasury Secretary Larry Summers appeared on CNBC and told host Jon Fortt that the bonuses being handed out by companies following the GOP tax bill amount to a “gimmick.”
FORTT: Mr. Secretary, I'm wondering your reaction to this response to corporate tax reform where several companies are giving up to $1,000, in some cases more than that, to workers as sort of a one time thing. When you look at the investment that's needed –
SUMMERS: I think it's a gimmick.
FORTT: – in the U.S. workforce to prepare for the future. Okay, tell me more.
SUMMERS: I think it's a gimmick. I think in many cases, the firms have to raise wages because labor markets are tight and so why not curry some favor with the White House by linking it to the tax cut? I think that it's a very common device. If you want to give somebody some money, but you don't want to promise it to them on a continuing basis, you frame it as a bonus. So I think there's a lot of appearance management here, and look, the corporate tax cut's gonna be forever. If the firms really believe this had to do with the corporate tax cuts, why aren't they committing the bonuses [forever]?
According to Americans for Tax Reform (ATR), "at least 267 companies have already announced wage and salary increases, bonuses, or 401(k) match increases" since the GOP tax bill was signed into law by President Trump.
This isn’t simply about one-time bonuses. Multiple companies have raised (or promised to raise) wages, including Walmart, Bank of Hawaii, Nexus Services, Bank of New York Mellon, BB&T, Capital One, Starbucks, F.N.B. Corporation, Humana, Musicnotes, Nephron Pharmaceuticals, Wells Fargo, and many others.
A number of companies have also decided to give employees company stock, increase 401(k) matching, pass energy savings on to customers, and invest in new equipment and general expansion.
Click here to see the continuously updated list.