Raise Wages via Growth, Not Mandates
By Andy Puzder
The Wall Street Journal
January 7, 2018
The formula is simple: When the economy accelerates, employers compete for employees and wages increase.
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President Trump’s regulatory rollback is driving an economic surge few anticipated. Tax reform promises to accelerate that growth by encouraging business investment and eliminating the perverse incentives that drive companies, jobs and investments to other countries. The true test for these pro-growth policies is whether they result in a more participatory economy, in which workers’ incomes meaningfully increase over the long run. The early results are promising.
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After the GOP passed its tax bill, major U.S. employers including AT&T , Bank of America , Boeing , Wells Fargo , Fifth Third Bank, Comcast NBC Universal and Sinclair Broadcasting immediately committed to investing billions in growth, special bonuses or higher wages. Wells Fargo and Fifth Third are voluntarily increasing their base wages to $15 an hour.
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With regulatory relief, tax cuts and the increased business that comes from economic growth, employers now have the resources to bid up wages. Competition will spread those increases without the unintended consequences of a dramatic minimum-wage increase.
That competition kicked in almost immediately as more than 100 diverse businesses, including Wisconsin-based Associated Bank , North Carolina-based BB&T Corp oration, Pennsylvania-based PNC Financial Services Group , New Jersey-based OceanFirst Financial Corp. , Georgia-based Sun Trust Banks, Minnesota-based US Bank, the Bank of Hawaii , and South Carolina-based Nephron Pharmaceuticals announced pay hikes for workers within two weeks of the tax bill’s passage.
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