Former Treasury Secretary Lawrence Summers said Friday that the company bonuses awarded to hundreds of thousands of employees across the country due to the Trump tax cuts are nothing but a “gimmick” meant to boost PR.
“I think it’s a gimmick,” Mr. Summers, who headed the Treasury Department under President Bill Clinton and the National Economic Council under President Barack Obama, told CNBC’s “Squawk Alley.”
“I think in many cases the firms have to raise wages because labor markets are tight, and so why not curry some favor with the White House by linking it to the tax cuts,” he said. “I think that it’s a very common device: If you want to give somebody some money but you don’t want to promise it to them on a continuing basis, you frame it as a bonus. So I think there’s a lot of appearance management here.”
Mr. Summers argued that if the tax cuts are to continue “forever,” so should the bonuses.
He also said the Obama administration had a much more “grown-up approach” to labor economics by tracking monthly job creation numbers “rather than to focus on high-profile announcements by particular companies,” CNBC reported.
“And if you look, job growth in 2016 was considerably faster than job growth in 2017. So you have a lot of stuff here that is PR,” he said.
A growing list of companies — including Apple, AT&T, Boeing, Comcast, Disney, FedEx, Home Depot, Starbucks, Walmart, Wells Fargo and Verizon — have announced new bonuses, extended benefits and wage increases for employees in reaction to the passage of the Republican tax plan, which lowered the corporate tax rate from 35 percent to 21 percent as of Jan. 1.
Top Democrats like House Minority Leader Nancy Pelosi and Florida congresswoman and former DNC chief Debbie Wasserman Schultz have dismissed the bonuses as insignificant.
• Jessica Chasmar can be reached at jchasmar@washingtontimes.com.
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