How Trump's Corporate Tax Cut Is Playing Out For Wal
Mart Companies like Wal - Mart say tax cuts are making it possible for them to boost wages . But other economic factors could also be contributing to pay increases . MICHEL MARTIN   HOST : This week   Walmart joined a chorus of companies who say the big corporate tax cut is motivating them to raise wages   pay bonuses and make more investments . But that good news story was undercut later in the same day when word trickled out that Walmart is closing 63 of its Sam ' s Club warehouse stores and laying off thousands of workers . We ' ve asked NPR economics correspondent John Ydstie to join us to sort this out . So   John   thanks for joining us   first of all . JOHN YDSTIE   BYLINE : Happy to be here   Michel . MARTIN : Well   Walmart seems to be feeling generous with some of its employees and laying off others . And what role is the tax cut playing in this   if any ? YDSTIE : Well   there ' s no doubt that Walmart and many other companies are very happy that the top corporate tax rate was slashed from 35 to 21 percent . It ' ll save Walmart billions of dollars a year . And it certainly makes it easier for the company to raise its minimum wage to 11 bucks an hour . But there are other forces at work here that have little to do with the tax cut . MARTIN : Well   what are those forces ? YDSTIE : Well   the U . S . unemployment rate is down to just over 4 percent   very close to full employment . So Walmart needs to raise wages just to attract and hang onto employees . And there ' s evidence that that helps . Walmart boosted wages and training back in 2015 . And according to the analysts   that helped them increase same - store sales continuously since then . MARTIN : Well   that invites the question of why Walmart is closing 10 percent of its Sam ' s Clubs   and as we understand it   that that means laying off some 11   000 workers . Well   even though the overall economy is strong   for traditional retailers   there are challenges like online shopping . Walmart says those Sam ' s Club stores were underperforming . The company does say it is going to convert about a dozen of them to e - commerce fulfillment centers   so some of those workers may be rehired . MARTIN : But as we said earlier   it ' s not just Walmart saying the tax cut is motivating them to boost wages and investment . AT & T and Wells Fargo   just to name a couple of companies that people may have heard in the news   are saying the same things or similar things . How should we assess what they ' re saying ? YDSTIE : Well   I think in the case of both of them   there are additional factors at play . For one thing   both have a reason to try to curry favor in Washington . MARTIN : Because Wells Fargo is being penalized by the government for deceiving customers . And  President Trump  has threatened even more punishments . So Wells Fargo has an interest in saying the tax cut is the reason it ' s boosting wages for its employees   precisely what  the president  predicted would happen   in order to gain favor with  Trump  and avoid more penalties . That said   Wells Fargo is also competing for workers in a strong economy   so they might have boosted wages whether there was a tax cut or not . MARTIN : But what about AT & T ? YDSTIE : We don '  t  know for sure . But remember   AT &  T  wants to buy Time Warner   but  the Trump administration  is blocking that deal in court . So AT &  T  could be thinking that saying the tax cut motivated the company to pay big bonuses to workers might just get  the Trump administration  to ease its opposition to the deal . MARTIN : So the economy is pretty strong right now . Is that the result of these tax cuts ? YDSTIE : Well   business confidence in the U . S . has risen in the past year   partly anticipating the tax cut and also in response to regulatory restraint by  the Trump administration  . So that may have boosted the U . S . economy a bit   but the economy was already on a solid foundation . And a good deal of the recent pickup is due to the very positive global economic picture   which has little   if anything   to do with U . S . taxes . MARTIN : That ' s NPR economic correspondent John Ydstie . YDSTIE : You ' re welcome   Michel . ( SOUNDBITE OF   "") Copyright © 2018 NPR . Visit our website terms of use and permissions pages at www . npr . org for further information . NPR transcripts are created on a rush deadline by Verb8tm   Inc .  an NPR contractor   and produced using a proprietary transcription process developed with NPR . This text may not be in its final form and may be updated or revised in the future . Accuracy and availability may vary . The authoritative record of NPR ’ s programming is the audio record .
Mart Companies like Wal - Mart say tax cuts are making it possible for them to boost wages . But other economic factors could also be contributing to pay increases . MICHEL MARTIN   HOST : This week   Walmart joined a chorus of companies who say the big corporate tax cut is motivating them to raise wages   pay bonuses and make more investments . But that good news story was undercut later in the same day when word trickled out that Walmart is closing 63 of its Sam ' s Club warehouse stores and laying off thousands of workers . We ' ve asked NPR economics correspondent John Ydstie to join us to sort this out . So   John   thanks for joining us   first of all . JOHN YDSTIE   BYLINE : Happy to be here   Michel . MARTIN : Well   Walmart seems to be feeling generous with some of its employees and laying off others . And what role is the tax cut playing in this   if any ? YDSTIE : Well   there ' s no doubt that Walmart and many other companies are very happy that the top corporate tax rate was slashed from 35 to 21 percent . It ' ll save Walmart billions of dollars a year . And it certainly makes it easier for the company to raise its minimum wage to 11 bucks an hour . But there are other forces at work here that have little to do with the tax cut . MARTIN : Well   what are those forces ? YDSTIE : Well   the U . S . unemployment rate is down to just over 4 percent   very close to full employment . So Walmart needs to raise wages just to attract and hang onto employees . And there ' s evidence that that helps . Walmart boosted wages and training back in 2015 . And according to the analysts   that helped them increase same - store sales continuously since then . MARTIN : Well   that invites the question of why Walmart is closing 10 percent of its Sam ' s Clubs   and as we understand it   that that means laying off some 11   000 workers . Well   even though the overall economy is strong   for traditional retailers   there are challenges like online shopping . Walmart says those Sam ' s Club stores were underperforming . The company does say it is going to convert about a dozen of them to e - commerce fulfillment centers   so some of those workers may be rehired . MARTIN : But as we said earlier   it ' s not just Walmart saying the tax cut is motivating them to boost wages and investment . AT & T and Wells Fargo   just to name a couple of companies that people may have heard in the news   are saying the same things or similar things . How should we assess what they ' re saying ? YDSTIE : Well   I think in the case of both of them   there are additional factors at play . For one thing   both have a reason to try to curry favor in Washington . MARTIN : Because Wells Fargo is being penalized by the government for deceiving customers . And  [TGT]has threatened even more punishments . So Wells Fargo has an interest in saying the tax cut is the reason it ' s boosting wages for its employees   precisely what  the president  predicted would happen   in order to gain favor with  [TGT]  and avoid more penalties . That said   Wells Fargo is also competing for workers in a strong economy   so they might have boosted wages whether there was a tax cut or not . MARTIN : But what about AT & T ? YDSTIE : We don '  t  know for sure . But remember   AT &  T  wants to buy Time Warner   but  [TGT]is blocking that deal in court . So AT &  T  could be thinking that saying the tax cut motivated the company to pay big bonuses to workers might just get  [TGT]to ease [TGT] opposition to the deal . MARTIN : So the economy is pretty strong right now . Is that the result of these tax cuts ? YDSTIE : Well   business confidence in the U . S . has risen in the past year   partly anticipating the tax cut and also in response to regulatory restraint by  [TGT]. So that may have boosted the U . S . economy a bit   but the economy was already on a solid foundation . And a good deal of the recent pickup is due to the very positive global economic picture   which has little   if anything   to do with U . S . taxes . MARTIN : That ' s NPR economic correspondent John Ydstie . YDSTIE : You ' re welcome   Michel . ( SOUNDBITE OF   "") Copyright © 2018 NPR . Visit our website terms of use and permissions pages at www . npr . org for further information . NPR transcripts are created on a rush deadline by Verb8tm   Inc .  an NPR contractor   and produced using a proprietary transcription process developed with NPR . This text may not be in its final form and may be updated or revised in the future . Accuracy and availability may vary . The authoritative record of NPR ’ s programming is the audio record .