Bonuses? They’re Turkeys
Terry H. Schwadron
Dec. 23, 2017
There was a time when companies gave employees a Christmas turkey, a seasonal thank you for supportive hard work during the year.
That, of course, went the way of the dodo, as relationships between employers and employees grew more distant, more formal, more ephemeral — and more temporary. It would likely come as an old-fashioned surprise to Generation Z (or whatever we’re now up to) that people used to expect to work for a company for their entire life. Or at least the same industry. Or follow a plan.
Much of that has also gone away, as manufacturing line employees have learned what artists, musicians, writers and dancers learned long ago: Work is a set of projects and your career is your path through them. The wide variety of career types these days mirrors the imagination of everything from entrepreneurship to finding a group to start a new service. With electronics and technology at hand, often, location is not a bar, just a possible convenience.
Along the way, the employer-employee relations have changed quite a bit. Even when unions and management had gone at one another with tough negotiations, both group had felt some loyalty to product and the nature of the services being delivered.
In the current era, where the most profitable companies make more money through mergers and acquisitions, where companies use buyouts to rid themselves of their most experienced employees, where hiring is a constant churn and recruitment means raiding competitors rather than training new generations, we all recognize that the wage gap between executive and worker is seriously out of whack.
So, when a new president steps in. claiming to be a “populist” who will bring wage growth back, you’d expect an approach to tax changes that might reflect those campaign promises. But no, the new tax bill clearly favors those already rich in the expectation, as traditional Republican philosophy would have it, that prosperity will come to all through eventual growth in the national economy. Indeed, as companies get lowered taxes, we should all expect raises worth in the average neighborhood of $4,000, said Treasury Secretary Steve Mnuchin, as well as the president.
I won’t even deal with the fact that it is exactly this growth over the last nine years since the executive class nearly sank the world economy, that has delivered prosperity in decidedly sporadic means, leaving whole industries and states out of the picture, and delivering to those most wealthy already. I just want to see the results now — which brings us to the reaction to this new tax bill. The stock market, which had been booming in advance of the news, has been slightly off since actual passage in Congress. And within hours of the bill’s final passage, a number of corporations did step up and say that they would do their part to pass their expected gains to workers.
AT&T announced a $1,000 bonus to each non-management worker, followed by some banks. Thank you, but don’t look too closely: The $1,000 is a bonus, not a raise, not a permanent adjustment of salary.
It is a Christmas turkey.
Wells Fargo nnounced a company-wide minimum wage of $15 an hour. Comcast announced $1,000 bonuses for some non-executive employees and a investment in its infrastructure. Boeing unveiled a $1000 employee training package. In all, there are two dozen announcements.
The president jumped on his tweeting platform to note that “companies are already making big payments to workers.”
Of course, this is the same AT&T that is looking for government help right now in permitting its merger with TimeWarner, which, in turn, will result in thousands of layoffs. The Communication Workers of America, which represents more than 200,000 workers at the company, says that it wrote to AT&T and a number of other companies last month, asking them to commit to a $4,000 wage increase — the amount, as it happens, Republicans say the average American will gain as a result of tax reform. AT&T chief executive Randall Stephenson told the union they would give those employees the one-time $1,000 bonus, should the tax reform proposal become law — not a raise in salary. Of course, AT&T could have done this before the tax bill too. Of course, that would mean suggesting that the tax bill may not lead to the economic nirvana anticipated by Republicans.
Just incidentally, I think Comcast has a stake in net neutrality issues with the government, and Boeing does just a little bit of government business. Publicly supporting the president in his hour of victory strut could probably help just a bit later on, I would think.
Economists have noted that most of the Fortune 500-level companies have been flush with cash for a while now, and could have been using money for better salaries rather than buying down debt — or buying out TimeWarner.
The bonuses are good news, no doubt. But it would be a mistake to see them as a harbinger of the level of economic success projected as a part of the tax changes. Think of them as good public relations, and a chance to back up a president who can do them some good. That’s how we keep American companies and executives great.