Few large US companies say they'll use tax savings to boost wages

[BeyondGeography]

Despite a handful of high-profile announcements, the recent cuts in corporate taxes haven't yet had a meaningful impact on American companies' plans to boost investment or raise workers' pay, a CNBC survey of large companies found.

...Of the 100 biggest companies by market capitalization on Jan. 4, roughly half did not respond to CNBC's multiple requests for comment on the impact of the tax bill on their plans for investment or workers' paychecks. Another 21 responded but had no comment. The same number responded with general comments that did not include specific details on investment or worker compensation.

Only 10 companies in the S&P 100 contacted by CNBC said they have specific plans to use some of the money saved from the corporate tax cuts to boost worker pay or invest in facilities or charitable causes.

...It's also unclear how smaller employers will deploy any savings from the new tax law. Roughly half of all American workers are employed by companies with payrolls of fewer than 500 workers, according to the Small Business Administration.

Proponents of the tax law argue that lower taxes will help smaller companies boost wages as they compete to hire workers in a tight labor market. Yet some economists, including Joel Naroff, chief economist at Naroff Economic Advisors, doubt that most small businesses will see a big enough windfall to pass those savings along to workers.

https://www.cnbc.com/2018/01/17/few-large-companies-say-theyll-use-tax-savings-to-boost-wages-cnbc-survey-finds.html

[Afromania]

1. Should have been a law that forces them to spend a certain percentage of these profits on

wages, new hires, etc.

[Ohiogal]

4. I agree with you 100%. If they don't do this, then no tax cut for them. Make them prove it.

[still_one]

2. What it should do but wont, is cause companies to hire more people. The fallacy of this and

other trickle down endeavors, and why they fail is that hiring is motivated by demand for products and services, not tax cuts

[CentralMass]

3. I'm shocked.

[unblock]

5. no shit. from a business perspective, the tax savings have zero to do with wages.

any windfall is pure gravy for investors, and a few top executives who have compensation based on such things.

wages are based on marginal profitability and market price of those particular jobs. if you can hire a worker for minimum wage, a business has no real logic in paying any more, even if it found billions of dollars due to a tax law change.


at least that's the prevailing wisdom, which doesn't see any value in making employees feel like a key part of the whole team, or even in reducing the chance of resentful employees and associated risks.