Democrats, led by Nancy Pelosi, argued that the Republican tax reform bill would be a disaster. And she was correct, with one caveat — it’s becoming a disaster for Democrats. Starbucks has announced broad wage and benefit increases for its 150,000 employees and directly links the move to the benefits of the tax law passed one month ago:
— FOX Business (@FoxBusiness) January 24, 2018
Starbucks said Wednesday it will increase wages and enact other perks for more than 150,000 U.S. employees as a direct result of recent tax reform, joining other corporations in rewarding workers.
The Seattle-based coffee chain is giving all of its U.S.-based hourly and salaried workers an unspecified raise in April, in addition to a wage increase already dispersed earlier in the Starbucks’ fiscal year, which began last October. Starbucks says it is investing roughly $120 million in the wage increases.
Starbucks is also awarding workers stock grants worth a total of more than $100 million to those employed by the chain as of Jan. 1, 2018. Retail employees will receive at least a $500 grant, while store managers will receive grants of $2,000, the chain said.
How awful for those poor employees! But hey, Starbucks is just one global corporation among many. It’s an outlier, right? Er … not really:
Disney announced Tuesday it will pay over 125,000 employees a one-time cash bonus of $1,000, as well as make a new $50 million investment into education program for employees.
“We are directing approximately $125 million to our cast members and employees across the country and making higher education more accessible with the launch of this new program,” CEO Bob Iger said in a statement.
Disney says both initiatives are due to recent tax reform. Some of the biggest companies in the United States have been giving out bonuses to employees, often citing the recently-passed tax bill as the motive. Boeing, AT&T, Wells Fargo, Comcast, Bank of America and Walmart are just a few of those distributing new tax benefits to workers.
The bonus applies any full-time and part-time employees who have been working for Disney since before January 1. Those eligible will receive the bonus in two parts, with one in March and the other in September. Executive level employees are exempt.
Yahoo’s Rick Newman wonders if Democrats can hear Americans now:
Democrats in Washington seem to think they’re sailing into major gains in the 2018 midterm elections, with a good chance to take control of the House of Representatives, and an outside chance of taking the Senate. This may be delusional. It’s not easy to move the needle on the economy, and Trump, for all his bellicose Machiavellianism, is doing it. The economy could be peaking, in fact, just as voters go to the polls in November.
Nearly 100 companies, including AT&T (T), Apple (AAPL), Boeing (BA) and American Airlines (AAL) have announced raises, bonuses, benefit improvements or new investments in the aftermath of the $1.5 trillion tax cut Trump signed in December. A large majority of Americans will see their paychecks rise this year, as the government changes its withholding tables and taxes take a smaller bite. When Yahoo Finance examined the changes recently, we found that a typical worker earning $60,000 would get back an extra $112 per month, or $1,344 per year. …
Trump is obviously unpopular, with a dismal approval rating that’s almost unbelievably low given record stock prices and a strong job market. But Democrats would be foolish to think simply running against Trump will produce victory in November. Pocketbook issues almost always dominate elections, and with good times returning, voters simply won’t believe Democrats who say the Trump economy is terrible. In reality, it’s not terrible. It’s pretty good and getting better.
Democrats might still have a compelling message this year if they run on restoring dignity to government, or bolstering women, or fixing the broken health care system, or reinstating environmental protections. But the economy will not be their issue in 2018, and Democrats claiming the Trump economy stinks will seem as out-of-touch as all the other politicians Trump has already defeated.
As I wrote last week in my column at The Week, the cognitive dissonance might derail Democrats altogether:
Rather than adjusting to the reality of these tax cuts, Democrats have tried telling taxpayers that they can’t believe their own eyes — or bank accounts — when it comes to finding benefit in these developments. House Minority Leader Nancy Pelosi called an additional $2,000 in bonuses “pathetic … crumbs” last week, a little over six years after calling a $40 uptick every two weeks from the 2011 budget compromise “a victory for the American people.” For those who see $2,000 as a windfall, the “crumbs” remark sounds awful, a form of snobbery that will only play well among the Beltway elite.
Bear in mind that in most cases, American workers have yet to see any impact from tax reform. The bonuses are in the near future, as are the implementations of new withholding tables at most U.S. employers. And yet a new Survey Monkey poll shows a significant improvement in polling for the tax reform bill, rising from 37 percent approval in that series in mid-December to 46 percent this week. Overall consumer confidence “rose significantly in January after remaining flat for most of 2017,” The New York Times reports.
Imagine what will happen when the impact of the tax cuts actually hits American paychecks. The cognitive dissonance between Democratic hyperbole and personal voter experience will be massive. And in a country where “it’s the economy, stupid” still acts as one of the best predictive models for voter behavior, that dissonance will get felt in the same places where Democrats have been on the retreat: the middle-class, middle-America districts that have gone red for nearly a decade at all levels of electoral politics. That would leave Democrats with the same coastal-urban enclave footprint they have now.
By November, most of America would hardly see that as a catastrophe, either.