Like many of the corporate beneficiaries of Trump’s Republican tax bill, who stand to earn millions of additional dollars this year at the expense of the nation’s deficit, Walmart is eager to appear to be sharing some of the extra profit with its employees to help reinforce the discredited “trickle-down” economic theory that the bill’s sponsors cited as the primary motivation for the corporate tax giveaway.
The massive retailer announced today that it will raise wages and offer bonuses of up to $1,000 to its employees as a result of the reduction in its tax contributions. The reality behind the splashy announcement is quite more complicated than the headlines indicate, according to a series of reports on Think Progress.
The bonuses will equal only about two percent of the value of the company’s tax cut, according to Think Progress and only the most tenured employees will get the full $1,000 bonus. The Walton family that controls the dominating retailer is the richest family in America with an estimated net worth of over $130 billion.
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“First, Walmart employees are eligible for the $1,000 bonus only if they’ve worked at the company for 20 years. Most Walmart employees, of course, haven’t worked there that long. Those employees will receive a smaller bonus based on seniority. Walmart didn’t explain exactly how the sliding scale will work, but said the total value of the bonuses will be $400 million. Walmart has about 2.1 million employees, which works out to be an average bonus of about $190.”
Walmart’s announcement that it was raising the minimum wage at its stores from $10 to $11 per hour is equally suspect when it comes to whether it was a result of the Republican tax giveaway.
The reality is that in at least some states the raise was mandated by new minimum wage requirements passed as a state law that Walmart must comply with whether they receive tax cuts or not. And with both Target and Costco, fierce Walmart retail competitors, already paying higher wages, the company has some compelling reasons to raise workers’ pay if they want to retain their employees.
Actual Walmart employees expressed their lack of enthusiasm for the announcement on Twitter.
I want to reiterate: we already make 10.50 an hour. I make 10.70 because we get 2% raises across the board no matter how hard we work (lol). This means we'd get the 11 in May anyways https://t.co/BD3Fyw2Iy2
— King Shit of Fuck Mountain (@Sklernks) January 11, 2018
What is most disturbing, however, is the fact that Walmart appears to have timed the announcement of the raises and bonuses to distract the public from the fact that it was actually unexpectedly laying off thousands of employees and abruptly shuttering 63 Sam’s Club big box stores without notifying many employees in advance. Reports abound of employees at the closed stores showing up to work this morning only to face locked doors and a notice posted on the entrance alerting them and the public to the closure.
A Walmart company spokesperson released a statement confirming the closures but avoided mentioning the tax cuts, raises, or bonuses in this context.
“After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy. Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition,” the statement read.
Walmart’s coupling of raises and bonuses supposedly inspired by the corporate tax giveaway with massive layoffs is not the only instance of companies trying to cover-up their bad news with feel-good stories of corporate largesse. Both AT&T and Comcast have announced that they will be giving employees bonuses as a result of their tax windfalls, while simultaneously announcing large layoffs.
In the meantime, we can expect the historical failure of tax cuts for wealthy corporations and individuals to trickle down to anyone else to continue.