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AT&T to pay $1000 bonus due to tax cuts

22 December 2017

With bottom lines set to swell, AT&T is not the only firm promising good news for staff. Media group Comcast said it would also hand out $1,000 to 100,000 staff and invest $50bn in better infrastructure over the next five years.

Under the new plan, the top corporate tax rate in the USA will fall from 35% to 21%.

Wells Fargo and Fifth Third Bancorp said they plan to hike their company-wide minimum wages to $15 an hour.

Matthew Gardner, a senior fellow at the liberal Institute on Taxation and Economic Policy, said companies have been sitting on large cash holdings for years that easily could have gone to workers before the tax cuts.

Tax reform was supposed to kill everyone.

Exactly how it will play out remains a topic of fierce debate.

"If these companies had wanted to make these investments in their workforce, they could have done it before now", Gardner said.

"In fact, we will increase our USA investment and pay a special bonus to our USA employees", Randall Stephenson, AT&T's chairman and CEO, said in the statement.

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The bonuses will go to blue-collar unionised non-managers. The funds will be split evenly among worker training, upgrading facilities and a program that matches employees' charitable contributions.

The Communication Workers of America, the union that represents many of those frontline workers, had demanded that employers guarantee the yearly $4,000 household wage increase that Republican lawmakers asserted would be the outcome of the tax cut.

"Today, Congress approved legislation representing the first comprehensive tax reform in a generation", AT&T said in a statement. With these investments, we expect to add thousands of new direct and indirect jobs.

Two company spokesmen confirmed the announcement was tied to tax reform.

Fifth Third Bancorp, a regional bank based in Cincinnati, said it will raise the minimum wage for all of its almost 3,000 hourly employees to $15, and would distribute a one-time bonus of $1,000 for more than 13,500 employees by the end of the year if the bill is signed by December 25.

CEO Greg Carmichael attributed the move to the tax legislation.

The bill has polled poorly with voters in part because it would appear to help major companies and concentrate much of its tax cuts with the top 5 percent of earners. That will mark a $1.50 increase over the company's current minimum of $13.50 per hour.

Shortly after the company announcements, the office of Senate Minority Leader Chuck Schumer said in a statement that the bonuses and higher minimum wages were "the exception, not the rule, when it comes to the biggest corporations spending their windfall".

AT&T to pay $1000 bonus due to tax cuts