- JPMorgan Chase has announced a five-year, $20 billion comprehensive investment to “help its employees, and support job and local economic growth in the United States.” The move is driven by strong, sustained performance; changes to the corporate tax system; and a “more constructive regulatory and business environment."
- The investment includes key areas for employees, including wage increases for 22,000 employees by about 10% and a reduction in health plan deductibles for employees who earn less than $60,000 per year. The company says it expects to hire an additional 4,000 workers over the five-year term.
- In addition, JPMorgan plans to increase lending opportunities to small business by $4 billion and accelerate affordable housing lending in low-and moderate-income communities.
The portion of the tax bill that slashed the corporate rate from 35% to 21% has spurred employers throughout the U.S. to invest their windfalls in their employees and their communities. The announcement from JPMorgan is just another in a list of companies increasing wages and 401k contributions to their employees, including other banks, insurance providers and retailers.
But not all of these increases may be able to be pinned cleanly on the tax bill. Walmart raised its minimum wage from $9 to $11 per hour and gave long-term employees a $1,000 bonus; at the same time, however, 63 of its Sam’s Club locations across the country were closed without notice. Some may see advantages to raising wages now to try and retain talent in a job seeker's market.
In addition to stimulus on the corporate side, employees should also be seeing the effects of the tax reform in their paychecks in the coming weeks. The Treasury Department just released the new withholding guidelines to employers that will go into effect on February 15. It’s estimated 90% of employees will see a reduction in their withholding taxes — more take-home pay — as a result.