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By Jaclyn Diaz
Major companies were quick to respond to the tax cuts passed by Congress Dec. 20 by announcing plans to share their gains with workers. Some labor unions are less than impressed.
AT&T Inc. said it will give 200,000 U.S. employees $1,000 bonuses once the legislation is signed into law. Wells Fargo and Fifth Third Bancorp both said they’ll increase wages to a minimum of $15 an hour, and Fifth Third will also distribute $1,000 bonuses to 13,500 employees.
Boeing announced it will invest $300 million in a combination of employee training, improved workplace infrastructure, and corporate giving.The corporate announcements were a surprise, the White House told Bloomberg Law.
“We weren’t coordinating with those companies on their announcements but were pleased to see tax reform deliver results to workers the day that it was passed,” a spokeswoman said.
The Communications Workers of America, which represents some AT&T workers, was quick to note that the bonuses fail to address the bigger issues. Other unions say they’ll believe CEOs will stick with their reinvestment promises when they see it.
“Corporations will see massive permanent gains from the bill but are only offering workers a relatively small, one-time bonus,” a spokeswoman for the CWA told Bloomberg Law.
Boeing and Wells Fargo didn’t immediately respond to requests for comment.
Fifth Third told Bloomberg Law it’s continuously evaluating ways to update its compensation and benefits package. The bank believes its $15 minimum wage and benefits package is competitive, a spokeswoman said.
The CWA has been outspoken against the tax bill. Its president, Chris Shelton, has asked employers to guarantee the $4,000 average wage increase that Republicans in Congress say will result from corporate tax cuts.
AT&T and the union have a tentative contract that includes a $1,000 bonus. Union members will vote on that pact in January.
The tax bill will “create good-paying jobs,” AT&T CEO Randall Stephenson said in a statement Dec. 20. “In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees,” Stephenson said.
A representative said the company wouldn’t comment beyond the statement.
“We are continuing to push companies to keep the promises that Republicans have made about the tax bill to raise wages and bring jobs back to the U.S.,” a CWA spokeswoman told Bloomberg Law. “It’s not unlike the tax bill itself--corporations get permanent tax breaks, but any gains working people make expire after a few years.
CWA said it will continue to pressure politicians to keep their tax bill promises.
The United Steelworkers say the union doesn’t rely on politicians to get better wages for workers-- it has collective bargaining for that.
“One of the greatest benefits of union membership is that our members do not need to rely on politicians cutting corporate taxes to be paid a fair wage for their work. Nor are they counting on the kindness and generosity of CEOs to grant yearly wage increases or bonuses,” a spokesman for the union said. “We negotiate collective bargaining agreements so that workers know how much they make and when they will receive a raise.”
If an employer’s bottom line is higher as a result of tax savings, the union will take that into account when it negotiates a new labor contract, the spokesman said.
The International Association of Machinists and Aerospace Workers, which represents workers at Boeing, said it hopes the bill will generate job growth and higher wages for working families, but history shows that probably won’t happen.
“History has shown that wealthy executives will simply use their giveaway for stock buybacks and dividends to shareholders. Instead of relying on failed trickle-down economics, imagine what could have happened if the $1.5 trillion redistributed to the wealthy was used for rebuilding our infrastructure. The proof is truly in the pudding,” Bob Martinez Jr., the Machinists international president, said in a statement.
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