09/28/2022

Tax Cuts Provide Limited Boost to Workers’ Wages

U.S. companies are putting savings from the corporate tax cut to use, but only a fraction of it is flowing to employees’ wallets, new data show.

In the months after the December tax-code overhaul that lowered the corporate rate to 21% from 35%, dozens of companies such as Walmart Inc.and FedEx Corp. announced one-time bonuses and wage increases for hourly workers. Those moves earned praise from the Trump administration as evidence the cuts were quickly reaching many Americans.

Now, various surveys indicate that most companies aren’t passing the money directly to employees.

. . . Still, companies have been using the money for other investments. About a third of the companies surveyed by Korn Ferry said they would direct tax-cut savings toward such programs as worker training.

“Companies are investing in people, but it’s much longer term,” said Tom McMullen, senior client partner at Korn Ferry.

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