Yes, It’s Good PR for Companies to Give Bonuses and Wage Increases in the Wake of Tax Reform

Often, police can prove what happened by relying on indisputable DNA evidence or camera footage. But getting inside somebody’s brain—establishing a motive—can be tricky.

That’s the dynamic we have been facing the last couple days, as modern-day Inspector Clouseaus sift through corporate news releases, scrutinizing the motives of major companies that have suddenly announced big holiday bonuses for workers and millions in new investments. In reality, they already have the evidence they need.

Here’s what we know:

• On Wednesday morning, Congress passed the biggest tax-reform bill in 31 years.
• The bill indisputably helps corporations. It lowers the top corporate tax rate from 35 percent to 21 percent and creates incentives for companies to invest in machinery and other equipment.
• On Wednesday afternoon, major companies started announcing worker bonuses, higher pay, and investments that they said were tied to passage of the tax bill. Boeing said it would spend $300 million on worker training, workplace enhancements ,and charitable giving. AT&T said it would pay a special $1,000 bonus to 200,000 front-line union workers and invest an additional $1 billion. Comcast said it would pay $1,000 bonuses to 100,000 workers and spend $50 billion on infrastructure in the next five years. Wells Fargo and Fifth Third Bank said they would boost minimum worker pay. Analysts expect more such announcements.

The hunt for corporate motivations should not obscure the clear evidence that positive effects are springing from the tax bill. Companies anticipate having more money, and they are spending at least some of it on their workers because it is good business. That’s an uncomfortable truth for some opponents of the tax plan who argued that workers would receive no benefits. In addition to giving tax cuts to a majority of taxpayers at all income levels, the GOP plan is designed to benefit workers by improving the economy. If businesses invest more, that means more jobs and higher wages. Those effects will take months to play out.

Of course, we should never ascribe pure Christmas-spirit altruism to large corporations whose purpose, after all, is to make money for shareholders. Are the new worker benefits a public-relations move? Do some of these companies have pressing business before the federal government and wish to curry favor with the Trump administration? Would they have spent some of this money anyway, even without a tax bill? The answers are yes, yes, and probably.

Then there is this question: Do workers benefit? Sooner than expected, the evidence points to “yes.”