Friday, January 12, 2018

Economic Ebb and Flow

Look, there is a natural ebb and flow of jobs in the United States when you approach January 1st.  There's tax incentive to tidy up your employee base before the beginning of a new year...so that you don't have to deal with it over the course of multiple returns.

However, the President couldn't have been happier when corporate announcements began to be reported: AT&T is going to give up to $1,000 bonuses to around 200,000 employees in response to the generous tax cut their receiving from the Federal government.  Similarly, this week, Walmart has indicated that they will be raising the minimum hourly wage AND giving out up to $1,000 merit-based bonuses.  That's not all!  CNN is reporting that Comcast, Boeing and Wells Fargo will be passing on some of their newfound wealth to their employees as a result of the new tax legislation.

But all is not how it seems.  Let's take them one by one.

AT&T, as it's widely been reported, has recently laid off 2,000 employees.  Some of them were from DirecTV where there may have been redundancies.  There were over 200 "highly skilled" technicians from the south who were handed pink slips.  And, there were others, but, using averages provided by GlassDoor.com, with lay-offs alone, the company just saved over $90 million to use for their newly announced bonus program.

Walmart, who owns Sam's Club, just surprised the business world by announcing the closing of 63 stores which employ, roughly, 175 employees.  Granted, some may be reshuffled, but the lowest paid employees at Sam's will likely not be.  Back of the envelope numbers suggests that over 11,000 Walmart employees just, suddenly, lost their jobs.

At Boeing in Seattle, over the course of 2017, 1,800 employees who would have been fired took buy-outs, and another 800 were laid off.

Comcast just laid off 500 employees, yes, a drop in the bucket...unless you're one of the 500.

Wells Fargo just laid off 5,300 employees.  Don't worry, they're bolstering their office in the Philippines, which went from a meager 100 employees to 4,000 in the past 6 years.

Business is business, and, frequently, jobs added don't make the headlines.  However, it seems to be a trend with the companies who have announced how good they're about to be to their employee base.  Before we credit the Federal government with creating an economic boon, consider those not reported in last month's unemployment statistics, which, economists agree, isn't the end-all be-all measure of a healthy economy.  Also consider those who stopped looking for work (i.e. early retiring Baby Boomers), who are on the verge of over-taxing our pension and entitlement programs just due to sheer volume.

It may be easy for a conservative to point out that "hey, you Dems aren't even happy when things are great, just because he's not who you voted for...snowflake!"  Yes, minimum wage increases and tax law-related bonuses are just part of the whole picture, and before we point out how peripherally beneficial the new tax law is, we need to understand the full stories around those companies and their one-off PR power play.

If the headlines next Christmas indicate that more $1,000 bonuses are being given, well, I'll be happy to be wrong.

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