Unions that represent about 6 million workers in the United States are urging companies to reveal how they’re spending tax-cut savings: On hiring and raises, like the Trump administration predicted? Or is the windfall benefiting mostly shareholders?
“Working people deserve to know how their employers plan to spend their tax savings so they can bargain for a fair share of the windfall and ensure that corporations do more to bring jobs home and improve pay and benefits,” CWA President Chris Shelton said in a statement.
After President Trump signed a measure that slashed corporate rates in December, the White House announced 300 companies had unveiled bonuses and raises, reaching 3.5 million workers.
But union leaders argue little of the wealth has helped their members, who work in restaurants, schools, hospitals, hotels and other low-wage roles.
“Working Americans are not the ones getting the raise from President Trump and Republican leaders’ tax cut,” SEIU International president Mary Kay Henry said in a statement. “Corporations are.”
Economists debate this point. Though some firms — such as AT&T, American Airlines, Disney, Pepsi and Walmart — said they’d give employees a bonus after Trump’s tax cuts, it’s hard to measure if or how the legislation boosted hiring.
The latest jobs report from the Bureau of Labor Statistics showed that the economy added 313,000 new positions in February — an unusually large burst. Pay, however, stayed flat.
The NFIB Small Business Economic Trends Survey, meanwhile, found last month that 22 percent of small business owners said they planned to soon bump up worker pay, and two-thirds said they’d spend more money on goods for their firms.
The most concrete result of the tax cuts, however, has been an increase in the amount companies spend in buying back their stocks, said Daniel Shaviro, a taxation professor at New York University’s School of Law.
American corporations announced about $218 billion in share buybacks since the GOP overhauled the tax code, with a record monthly high in February of $153.7 billion, according to TrimTabs, a California research firm.
“This was a direct response to the tax cuts,” said Winston Chua, a financial analyst who tracks buybucks. “It’s more for business owners and investors than the typical household.”
That was expected, Shaviro said: Companies make hiring and wage decisions based on demand — not on a windfall from Congress.
“The idea that it all goes to workers is silly,” he said. “Market forces will decide how they are paid.”
In the longer term, more companies could choose to invest in the United States as a result of the lower tax rates, which could create more jobs.
“This takes years to happen,” Shaviro said. “You don’t just say I’m going to put my motorcycle plant in Indiana and start hiring tomorrow.”
At a February news conference, Kevin Hassett, who leads the White House’s Council of Economic Advisers, noted businesses were pouring money into buying their own shares — but a larger investment for workers was on the way.
“Right now we’re going to have an adjustment where you see probably more dividends and share buybacks than wage increases,” he said. “Going forward we’re going to see a lot of capital formation and wage growth.”
The union leaders argued Wednesday that companies must provide the financial information they requested, which they consider relevant to contract negotiations, or risk getting slapped with an Unfair Labor Practice complaint under federal law.
Joseph Slater, a labor professor at the University of Toledo College of Law, said employers generally agree to keep unions updated about the financial health of the company, and the labor leaders could have a case if a firm pledged to funnel tax-cut savings to its workers.
“But there are limits on what information the parties have to share,” he said.
In a letter to AT&T, which in February reported a $19 billion fourth quarter (and $3 billion in extra cash), Ken Saether, administrative director of telecommunications and technologies for CWA, asked the company to share more of the wealth with employees.
“Raising workers’ pay and stopping the offshoring of jobs are central concerns of our union,” he wrote, “and the employees we represent, and we are deeply concerned that these promises will be forgotten unless we bargain for them.”