Remember when President Trump promised that American companies would use their tax bonanzas to give workers $4,000 annual raises? Working Americans shouldn’t count on that ever showing up in their paychecks.
According to two recent surveys, most companies aren’t planning to keep Trump’s promise. Those raises you’re reading about? They’re one-time bonuses, not long-term wage and salary increases.
- Few Companies Raising Wages: The business news network CNBC asked some of the largest companies whether they’re sharing their tax windfall with their workers. About 70 percent either had no comment for CNBC or didn’t respond at all, while another 20 percent answered evasively. Only 10 percent said they’re using their tax savings to raise pay, invest in their operations or contribute to charities.
- Bonuses, Not Raises: What about the companies that are publicizing pay hikes? Most are offering one-time bonuses—not permanent pay increases. The human resources consulting firm Willis Towers Watson took a closer look at companies that boasted they’re boosting workers’ pay. Eighty-eight gave workers one-time bonuses. But only 35 raised their pay scales.
- Workers Still Need Raises: Even Wall Street economists concede that workers need raises, not just bonuses. Stephen Stanley, chief economist at the brokerage Amherst Pierpont, said: “As a worker, it’s great to get a one-off bonus, but that doesn’t guarantee anything for next year. You’d rather have a raise because next year you’re working off the higher base.”