Walmart is crediting the GOP tax law for its pay hike. This is a shell game.

To much fanfare, Walmart announced a pay hike Thursday for its one-million-plus army of hourly employees. Many observers, and Walmart itself, are crediting the GOP’s tax overhaul for the company’s newfound generosity.

Don’t buy it.

Walmart currently pays $9 per hour for workers in training, with that wage rising to $10 once training is finished. Next month, the starting hourly wage for Walmart workers will rise to $11. The retail giant will also give one-time bonuses to employees, ranging from $200 to $1,000, depending on seniority. Full-time employees will also now receive 10 weeks paid maternity leave and 6 weeks paid parental leave, and can even get $5,000 in benefits for adoption.

These changes are obviously all very positive. And Walmart president and CEO Doug McMillon was quick to credit the GOP’s tax bill, which cut taxes on corporations like Walmart from 35 percent to 21 percent, for them.

“We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business,” McMillon said in a statement. “Some guiding themes are clear and consistent with how we’ve been investing — lower prices for customers, better wages and training for associates, and investments in the future of our company, including in technology. Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”

This is all consistent with Republicans’ trickle-down story. But it’s nonsense.

Corporate profits after tax are higher than they’ve been in decades — much higher than they were back when investments and the economy were booming. The idea that burdensome taxes are behind the economy’s sluggish performance just doesn’t compute.

Walmart’s after-tax profits in 2017 were $13.64 billion. Its planned wage hike will cost $300 million annually, and its bonuses will cost $400 million. That’s a total of $700 million, or 5 percent of the company’s 2017 profit margin. (And remember, the $400 million in bonuses is a one-time thing, not an annual expenditure from now on.)

The idea that Walmart couldn’t afford to do this until the GOP cut its taxes is risible.

More likely, Walmart is afraid that if it doesn’t boost pay, it will start losing workers to competitors. Target hiked its starting wage to $11 last year, and plans to raise it to $15 by 2020. …read more

Source:: The Week – Business

      

(Visited 1 times, 1 visits today)

Be the first to comment

Leave a comment

Your email address will not be published.


*