Emily Neville
Emily Neville
Those stingy Republicans are at it again, this time, redistributing wealth.
Following the passage of the GOP tax bill in December, several companies have announced their plans to increase wages for their employees, among other benefits.
Walmart announced it would raise its minimum wage to $11 an hour. It will cost the largest private employer in the U.S. $300 million, plus another $400 million for giving out $1,000 bonuses. It’s also expanding its parental leave policy with an adoption benefit. Chief Executive Officer Doug McMillon said, “Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”
Starbucks announced it plans to spend $250 million on new employee benefits with a pay boost for domestic workers, allowing workers to save up time off for family and health, and will be increasing pay for its 150,000 U.S. hourly and salaried employees. The next time you enjoy a chai latte in Talley Student Union, it will not be more expensive, but the student working it will be paid more for the job (good for you, good for them).
Wells Fargo announced it would raise its minimum wage to $15 from $13.50 and donate $400 million only an hour after the tax bill was passed.
You might not have heard of these incredible benefits to low and middle-income employees, or you may have heard it painted in a different light. News sources like Vox are quick to point out that this may not be the whole story: the minimum wage for these companies has already increased in states where it’s required by law to be higher; $11 or $15 may be higher than $7.25 but employees will still struggle, and so on.
But let’s face the facts, people: company after company has announced wage increases, bonuses and expanded family leave policies since the GOP tax bill slashed federal income taxes for corporations from 35 percent to 21 percent.
It was high time that these measures were introduced; before the GOP tax bill, the U.S. had the third highest general top marginal corporate income tax rate in the world. According to Tax Foundation, we were only passed by the United Arab Emirates and Puerto Rico.
Yet we wonder why companies were leaving the U.S.? We’ve been practically running them out of town.
With more money – a lot more money – in the pockets of businesses both small and large, employees, upper management and stockholders will see benefits, not to mention all of the people who will find themselves newly hired by companies that can suddenly hire more workers. More money can stay in the company, allowing it to grow and expand (Amazon is seeking a second headquarters, and possibly in Raleigh), without shareholders losing their dividends.
As Bill Clinton would say, “It’s the economy, stupid.”
And it’s not just the large companies either, although those do employ many, many college students and North Carolinians alike. According to WRAL, “small business owners also found reason to celebrate.” Duke Energy said the tax bill would mean more jobs and increased capital investment.
Even as individuals, we have reason to celebrate an almost doubled standard deduction, the part of money we earn that we do not pay taxes on, and a lowered percentage of income taxable by the federal government.
While it may take time to see effects on small and local businesses, we can be sure that corporations are benefiting from the tax cuts, and as a result, so are their employees. With any true analysis of the economy there are a number of factors at hand, but it remains that President Trump’s promise to “bring jobs back” is somewhat, kind of working.
Ford Motor Company was planning on building a plant in Mexico, when instead, prompted by criticism from Donald Trump, it canceled its plans and added 700 jobs in Michigan this past year. IBM had a history of passing by U.S. workers in favor of overseas workers, when it changed course in December 2016 on the eve of a meeting with President Trump, unleashing plans to hire 25,000 American workers and invest $1 billion over the next four years. Lockheed Martin (LMT) is adding 1,800 jobs in Texas building airplanes.
President Trump emphasized progress on U.S. jobs and production sites during last night’s State of the Union Address, including a new Toyota-Mazda plant in Alabama that will employ 4,000 people.
The hope, or rather the expectation of Republican lawmakers and President Trump, is that a lowered corporate income tax rate coupled with deregulation and pressure from the administration will attract companies to America. Again, not just foreign companies – Apple has been hiding out in Ireland’s incredibly low tax rate for years.
Whether you directly benefit from the tax rate as a taxpayer or as an employee of a profiting corporation, you can be sure these major changes in the tax code affect you in some way. If you’re feeling completely lost when it comes to taxes, in past years Poole College of Management has offered free tax return assistance from a group of students, and should be releasing information for the 2018 season soon.
Let’s hear it for higher wages, paid family leave and more jobs in America. You might just have to thank the orange man upstairs.