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Sun Jan 28, 2018, 10:06 PM

Why $1,000 One Time Bonuses are Part of the Tax Scam

Let me give you a little background of what I've done for the past 22 years as work. I represent a union in the Greater Boston area and part of my responsibilities is to negotiate contracts with the employer on behalf of the union employees. The people I represent are mostly in the maintenance departments of schools, hospitals, pharmaceutical companies, museums and sports' facilities.

The pay ranges from a low of about $26 per hour for unlicensed employees, to a high of $40 an hour for licensed personnel (electricians, plumbers, HVAC). So. let's just put the average at about $33 an hour for the sake of this argument.

A $1,000 bonus is not a pay raise. It represents less than fifty cents ($.50) an hour for the year. 40 hours a week x 52 weeks = 2080 x 50 cents is $1,040.

The one time bonus, instead of a 50 cent raise means the bonus is only for one year. A fifty cent raise is every year, as your salary has increased. On top of that, overtime is now calculated at the higher rate of pay, compounding the increase when you work the overtime.

I have generally been getting 2 and a half to 3 percent raises, per year, for 3 year contracts. This means we are getting 75 cents to a dollar increase each year, for each hour worked.

If I had to go into a ratification meeting on a three year contract with a $1,000 bonus and no raises for 3 years, they'd kill me, let alone not ratify the Tentative Agreement (TA).

When we enter the negotiations, we are often offered a bonus from the other side, for opener. A bonus doesn't increase the salary and dies after it is paid, as a salary increase lives on to the employee (and all the employees to follow) forever.

These well publicized one time bonuses should be seen for exactly what they are, part of the overall scam being perpetrated on the middle class workers of this country.

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Arrow 52 replies Author Time Post
Reply Why $1,000 One Time Bonuses are Part of the Tax Scam (Original post)
louis c Jan 2018 OP
a kennedy Jan 2018 #1
Ms. Toad Jan 2018 #2
brush Jan 2018 #3
Proud Liberal Dem Jan 2018 #28
Cha Jan 2018 #4
oasis Jan 2018 #14
mopinko Jan 2018 #5
Takket Jan 2018 #6
tymorial Jan 2018 #10
NRaleighLiberal Jan 2018 #7
BigmanPigman Jan 2018 #8
Poppy9159 Jan 2018 #9
Flaleftist Jan 2018 #13
louis c Jan 2018 #19
forthemiddle Jan 2018 #24
TwistOneUp Jan 2018 #35
forthemiddle Jan 2018 #37
LanternWaste Jan 2018 #40
forthemiddle Jan 2018 #45
Pepsidog Jan 2018 #11
House of Roberts Jan 2018 #12
BobTheSubgenius Jan 2018 #15
George II Jan 2018 #16
moondust Jan 2018 #17
stuffmatters Jan 2018 #18
dalton99a Jan 2018 #20
fescuerescue Jan 2018 #21
maxrandb Jan 2018 #22
ProfessorGAC Jan 2018 #23
louis c Jan 2018 #36
Pobeka Jan 2018 #25
Dreamer Tatum Jan 2018 #26
MichMary Jan 2018 #29
Dreamer Tatum Jan 2018 #31
Skittles Jan 2018 #42
louis c Jan 2018 #49
NickB79 Jan 2018 #51
louis c Jan 2018 #48
unblock Jan 2018 #27
AtheistCrusader Jan 2018 #30
SunSeeker Jan 2018 #32
Nitram Jan 2018 #33
stuffmatters Jan 2018 #43
Nitram Jan 2018 #47
llmart Jan 2018 #34
Moral Compass Jan 2018 #38
lagomorph777 Jan 2018 #39
Skittles Jan 2018 #41
Miigwech Jan 2018 #44
Vinca Jan 2018 #46
Gothmog Jan 2018 #50
SunSeeker Jan 2018 #52

Response to louis c (Original post)

Sun Jan 28, 2018, 10:44 PM

1. Thanks for this info.......breaking it down is so informative.

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Response to louis c (Original post)

Sun Jan 28, 2018, 10:48 PM

2. Precisely, AND

I'm pretty sure they were rolled out for the PR - likely by executives working in concert with each other - for the purpose of countering the failed trickle-down economy reality.

My employee group is the only one at the university I work at that has not had a raise for 4 years. We were given (1) a week's additional paid leave last year and (2) a one-time $1,000 bonus this year. Meanwhile, everyone else has another thousand or so built into their base, so when we all get a % raise, my raise will be worth less because someone thought one-time compensation was just hunky dory for our employment group.

. . . and, as for the additional paid time off - since I work 80-100 hours a week because it takes that much time to do my job, the paid time off just meant I was donating more hours - since the work doesn't' get done if I'm sitting on my duff at home.

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Response to louis c (Original post)

Sun Jan 28, 2018, 10:55 PM

3. They're nothing but one-time bribes for trump and repugs to hype endlessly.

Only the stupid are fooled.

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Response to brush (Reply #3)

Mon Jan 29, 2018, 01:35 PM

28. "But why are you being so negative about such an awesome thing?!"

"Don't you like workers to get extra money? You're just a librul Trump hating Demonrat!"

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Response to louis c (Original post)

Sun Jan 28, 2018, 10:57 PM

4. K&R.. in your face bernie

marcus

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Response to Cha (Reply #4)

Mon Jan 29, 2018, 12:23 AM

14. Oooooooh yeah!

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Response to louis c (Original post)

Sun Jan 28, 2018, 11:11 PM

5. even annual bonuses are a scam.

my ex is a high paid techy, but half his pay is bonus and stock.
the level of mental manipulation involved in pretending you might not get a bonus every year was just psyops, i swear.

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Response to louis c (Original post)

Sun Jan 28, 2018, 11:16 PM

6. not to mention how little of the workforce is even GETTING a bonus or raise.

and those that are were grossly underpaid to begin with.

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Response to Takket (Reply #6)

Sun Jan 28, 2018, 11:34 PM

10. I have two jobs, one is a couple of nights a week, sat and Sunday morning

My main job is full time daily and I haven't had a raise in 3 years. My pay is also rather strange. I get a flat salary and then the rest is made up of an hourly rate against the work I bill to the customer. I work for a consulting firm. The flat salary is higher than my billable but my combined salary is low. If I was working directly for my customers I would be bringing in at least another 20k a year. Being a consultant has afforded me freedoms and flexibility that I wouldn't otherwise have. It also has helped me in my main focus which is counseling and social work.

Anyway about the raise... I do get a bonus which is nice but I would rather have the raise. I would also rather have a flat salary even if it meant making slightly less than what I make with billables. The reason for this is I really can't take any vacation or sick days. Though I will still receive my flat salary, I am not billing when I am out. This means that if I take a week off, I am making substantially less that month (I am only paid monthly).

I haven't taken a vacation in 2 years because I simply can't afford it. Though I have my side practice, I am breaking even because of my limited patient volume but the work is rewarding for me personally so I don't mind.

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Response to louis c (Original post)

Sun Jan 28, 2018, 11:21 PM

7. It's been going on for year - I worked for big pharma - in the 1990s they decided to

stop any sort of significant raises and go to giving the annual bonus - it sounded good until you considered the tax implications, and the fact that it was a way for them to avoid bigger base salaries - meaning bigger benefits.

We called it a failure back then - here we are decades later and they are still pulling that fast one and the media (and many many people) fall for it.

Just more republican, corporate wealth I have mine screw you bullshit

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Response to louis c (Original post)

Sun Jan 28, 2018, 11:24 PM

8. Oh goodie, a bonus really helps after 30 years of stagnant wages

while both spouses have to work full time, are living on credit and have changed careers and/or work 50+ hour weeks on top of college loan debt. Thank you soooooooo much!

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Response to louis c (Original post)

Sun Jan 28, 2018, 11:26 PM

9. It's Even Worse Than That

Everything you say is obviously true. In addition, the $1000 bonuses at Walmart will only go to those employees who have been here at least 20 years. You can bet that won't cover the employees working on the floor of each store.

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Response to Poppy9159 (Reply #9)

Mon Jan 29, 2018, 12:11 AM

13. 20 years?

The turnover rate for retail is pretty high. I doubt more than 5% have been there more than 20 years.

It would be nice to see a breakdown of exactly how much these companies save and what percent of that goes to the employees.

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Response to Poppy9159 (Reply #9)

Mon Jan 29, 2018, 11:05 AM

19. I knew that

and I find the whole PR thing from Wal Mart is misleading

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Response to Poppy9159 (Reply #9)

Mon Jan 29, 2018, 12:44 PM

24. Not only for 20 year employees

https://news.walmart.com/2018/01/11/walmart-to-raise-us-wages-provide-one-time-bonus-and-expand-hourly-maternity-and-parental-leave

All employees will be getting some bonus, just not the full 1000.00, that seems to be the max for employees that have been there for the 20 years.
They are also raising the minimum wage, which what this op is asking for, so its seems that Walmart, is doing what this op is calling for.

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Response to forthemiddle (Reply #24)

Mon Jan 29, 2018, 03:44 PM

35. Starting

Wal Mart is raising (they call it expanding) the minimum wage to $11. For *starting* employees. Wow! Now Mom can get that heart transplant she's been needin'...

Back in '03, Costco was paying cashiers $16.50/hr. Wal Mart ain't even there 15 years later.

Good to see you're shilling for them.

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Response to TwistOneUp (Reply #35)

Mon Jan 29, 2018, 04:58 PM

37. I was not shilling for them

In fact I do not shop at Walmart.
I was just putting out the factual information that was available if anyone wanted to see it.

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Response to forthemiddle (Reply #37)

Mon Jan 29, 2018, 05:13 PM

40. You should stick to that story. It even sounds plausible.

You should stick to that story. It even sounds plausible.

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Response to LanternWaste (Reply #40)

Tue Jan 30, 2018, 08:32 AM

45. So DU doesn't deal in facts?

All I did was correct an error that stated Walmart employees had to be employed 20 years before being eligible for the bonus.

I also pointed out that Walmart was raising it's starting pay, which was asked for in the original OP (raises in leu of bonuses) and since the starting pay is being raised, I assumed that they would be raising wages to at least match that starting point.

Once again, I do not shop at Walmart, but I don't like errors in reporting either.

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Response to louis c (Original post)

Sun Jan 28, 2018, 11:46 PM

11. Thank you for your informative post. Home Depot can shove their

bonus. I won’t be shopping there any longer.

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Response to louis c (Original post)

Sun Jan 28, 2018, 11:51 PM

12. I've never worked for a company that paid bonuses.

One time I won a $1000 drawing at the bank where I opened a checking account. I put the money in the account and didn't even do anything special with it. It just withered away paying bills as normal. That's all a thousand dollars will do for a family with two kids.

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Response to louis c (Original post)

Mon Jan 29, 2018, 12:29 AM

15. Thank you for what you do.

I was in the IBEW for almost 12 years, and the difference between union and nonunion shops was startling. A good part of the work I did was a legal necessity for getting an occupancy permit, and that was a Big Deal on larger projects. Substantial completion being granted was a requirement for a draw of millions, at times.

On top of that, a large part of my job was signing off on code compliance and warranty for life safety equipment, which held potential liability of millions more.

I never had a tiny qualm about making a decent living doing that work, and the fact that it was a decent living was in large part thanks to our bargaining agent, and the protections afforded by collective bargaining.

So many people are resentful of unions, but they ignore the role unions played in the creation of the middle class. I am very grateful to, and very supportive of what's left of the union movement.

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Response to louis c (Original post)

Mon Jan 29, 2018, 12:41 AM

16. How many of the bonus recipients of any company have subsequently lost their jobs?

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Response to louis c (Original post)

Mon Jan 29, 2018, 12:50 AM

17. Crumbs.

Presumably to buy people's silence and allow the oligarchs to make a big show out of how great tax cuts are for everybody. It wouldn't look good if they took all the money and went out and bought themselves new yachts and vacation homes without sharing a few crumbs with the people who do all the work.

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Response to louis c (Original post)

Mon Jan 29, 2018, 12:58 AM

18. Excellent post.Bonuses are no more than one time "tips" at the whims and control of Employers/Corps.

So much and so many forms of abuse in the bonus system; just another example of plantation economics.. right up there with "guest worker" programs instead of real immigration reform and, well, throwing paper towels at Puerto Rico while blocking their rightful federal aid.

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Response to louis c (Original post)

Mon Jan 29, 2018, 11:07 AM

20. Kick

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Response to louis c (Original post)

Mon Jan 29, 2018, 12:00 PM

21. We should encourage people to donate those $1k bonuses to Democratic leaders

Otherwise, the money will simply be gone forever and not make a difference.

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Response to louis c (Original post)

Mon Jan 29, 2018, 12:24 PM

22. Another way to look at it is how much these "one-time" bonuses are compared to the corporations tax

savings from the giveaway.

Even if every single Wal-Mart employee got a 1K bonus, that would add up to 0.05% of Wal-Marts reduction in corporate taxes.

So, the employees get 0.05%, and the executives get 99.95%.

That seems "fair", doesn't it?

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Response to louis c (Original post)

Mon Jan 29, 2018, 12:33 PM

23. Good Post Louis!

When i start hearing about these big firms offering the bonus and an increase in pay, then i'll pay attention. In the meantime, not so much.

Even in your work, you've been averaging 2.5 to 3% increases, while the 10 year average inflation rate has been reported at 3.22%/yr.

That means that companies got healthy by increasing wages by less than the rate of inflation. Now a one time $1000 is supposed to be a big deal.

Using your number of $33/hr and assuming 2.75% per year for five years, those salaries would have been $28.80 per hour 5 years ago. If wage increases had merely been tied to equal inflation, the average wage would be $33.75/hr, not 33. Hence this one time bonus doesn't even make up for the 75 cent difference for just this one year. Take into account the other 4 years, and it doesn't being to make up the losses to inflation over the last 5 years.

As you said, it's a PR scam.

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Response to ProfessorGAC (Reply #23)

Mon Jan 29, 2018, 04:57 PM

36. Wages haven't kept up with real inflation for a generation

Last edited Tue Jan 30, 2018, 10:43 AM - Edit history (1)

All we can do is make the jobs the best we can.

Each of these employees still make 20% more than a comparable non-union job.

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Response to louis c (Original post)

Mon Jan 29, 2018, 01:25 PM

25. AND ... the tax cut benefits to CEO's upper mgt are permanent!

Even if the bonus was larger, it is a *one time* bonus. The tax cuts are not intended to go away, that makes it worse.

Bonuses are a scam-bone being thrown to the electorate to try to mitigate the possibility of DEM's winning both chambers in Nov 2018.

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Response to louis c (Original post)

Mon Jan 29, 2018, 01:29 PM

26. Can you send me $500?

That's only half of the money you claim is useless and worthless.

I'll PM you my address. Thanks.

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Response to Dreamer Tatum (Reply #26)

Mon Jan 29, 2018, 01:48 PM

29. Yeah . . .

Crumbs. When I worked at a low-paying menial job a few years ago, my annual bonus amounted to about $250. I would love to have seen $1000.

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Response to MichMary (Reply #29)

Mon Jan 29, 2018, 02:03 PM

31. He could at least hook us up with one of those $80k union jobs

If not the $1000 itself.

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Response to Dreamer Tatum (Reply #31)

Mon Jan 29, 2018, 05:26 PM

42. that caught my eye too

 

"a low of $26 an hour"

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Response to Dreamer Tatum (Reply #31)

Tue Jan 30, 2018, 10:53 AM

49. Get into a union apprentice program

Last edited Tue Jan 30, 2018, 12:17 PM - Edit history (1)

We raise wages. Bonuses, in lieu of wage increases, are counterproductive.

Bonuses, because your company pays low wages, means you need a union.

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Response to Dreamer Tatum (Reply #31)

Tue Jan 30, 2018, 06:02 PM

51. Our factory had a dozen positions open a year ago

$26/hr unionized.

We've just recently filled the last one. We went through a hundred interviews, almost 30 people who got on-the-job training, hundreds of hours wasted on training since most of them quit within 2 months, to find 12 guys who could handle the work.

There's a lot more that goes into some of these jobs than simply showing up.

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Response to Dreamer Tatum (Reply #26)

Tue Jan 30, 2018, 10:41 AM

48. Every Worker deserves a raise every year

That's how I negotiate. If you make $25 an hour, you deserve a seventy five cent or one dollar raise per year.

Unions set the wage standards. A $1,000 bonus, with no wage increase, amounts to a one time bonus equal to one year of 50 cents an hour.

The middle class was built by organized labor which provided health care, pensions, annuities and wage increases.

Can you tell me where I said a $1,000 bonus was worthless? But it is far less than workers deserve, on a yearly basis, and far less than any of the 22 contracts that I negotiated in the past 4 years.

A one time $1,000 bonus, in lieu of a 3 year, annual percentage raise, is selling yourself short, in my opinion. If you are OK with "settling", that's your choice.

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Response to louis c (Original post)

Mon Jan 29, 2018, 01:32 PM

27. executives have learned it's bad p.r. to cash in bigly and leave employees in the dust.

the stock price goes up because the tax law gives an instant valuation boost, and then there are bigger bonuses for executives and their options are worth more and a stock repurchase plan and so on.

they know if they do all that and ignore employees they'll get some bad press, so they preempt it by giving employees token one-time bonuses first.

it's a p.r. move, just like a philanthropic advertising campaign.

nothing more.

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Response to louis c (Original post)

Mon Jan 29, 2018, 01:51 PM

30. It's not a scam. It's a signal of distrust.

No company in the country thinks these tax cuts will be around in 2 years. That's why it's a bonus and not a raise.

This will be a recession-inducing trainwreck, just like the last time the federal government (republicans in control) tried to cut taxes while increasing spending.


it's been properly framed as a one-time bonus, and should not even be part of any negotiation on pay this fiscal year.

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Response to louis c (Original post)

Mon Jan 29, 2018, 02:17 PM

32. Plus, only a tiny percentage got those $1,000 bonuses (only full timers with over 20 years).

Last edited Mon Jan 29, 2018, 07:10 PM - Edit history (1)

The vast majority at places that gave bonuses, like Home Depot and Wal Mart, got only around $200. At best. And this was a one-time payment, not a raise. Peanuts, considering these corporation got a permanent 40% tax cut (reduction in the corporate income tax from 35% to 21%). That is saving these corporations hundreds of millions of dollars.

It is so cynical of these corpirations to pull this stunt. But they know the MSM will not call them on it, and will just repeat the corporate press release as "news."

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Response to louis c (Original post)

Mon Jan 29, 2018, 02:40 PM

33. Someone on NPR reported that many companies had already planned bonuses anyway just to

keep employees. With employment almost maxed out, companies have to work harder to find and keep good employees.

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Response to Nitram (Reply #33)

Mon Jan 29, 2018, 07:22 PM

43. Factually:Union negotiation/contract by CWA more responsible for AT&T bonuses than Tax Scam Bill.

Plus At&T was especially primed to miscredit (ego feed) Trump instead since they're trying to merge with Time Warner.

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Response to stuffmatters (Reply #43)

Tue Jan 30, 2018, 09:24 AM

47. I'm stickin' to the union, till the day I die.

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Response to louis c (Original post)

Mon Jan 29, 2018, 03:21 PM

34. Let's not forget this also...

Some of an employee's benefits are calculated on your base salary which does not include that $1,000 bonus.

Also, they will not be bringing home $1,000 if they are given a $1,000 bonus.

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Response to louis c (Original post)

Mon Jan 29, 2018, 05:05 PM

38. Agreed, a $1000 bonus is chump change

One, louis c is absolutely right. A $1000 bonus is chump change.

The most important point is the tiny percentage of corporations that are boosting pay in any way.

I work for a major retailer and there has been nothing. Crickets.

This from a company that as a matter of corporate policy floods the sale floor with straight commission sales personnel so earnings per sales person have dropped substantially in the last few years. This during a time when profits have soared.

This is what is happening with most companies. If anything a bonus—which is purely temporary. Or nothing at all.

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Response to louis c (Original post)

Mon Jan 29, 2018, 05:08 PM

39. We're going to find out that it's specifically coordinated.

It's as obvious as all the coordinated Putin/GOPutin talking points.

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Response to louis c (Original post)

Mon Jan 29, 2018, 05:24 PM

41. that's even if you GET a bonus

 

MOST PEOPLE WILL NOT

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Response to louis c (Original post)

Mon Jan 29, 2018, 09:28 PM

44. The trump/GOP tax cut is a mega scam

but everyone needs to understand is when someone in the working class gets $1,000 bonus, that is big news to that person. They will take the money and love getting it. If someone gave me $1,000, I would be ecstatic. Not saying that folks will be lining up to thank trump.

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Response to louis c (Original post)

Tue Jan 30, 2018, 08:39 AM

46. It reminded me of George W. Bush's $300 checks -

political bullshit and, in the end, almost totally worthless. ALL workers must be paid a living wage. A few getting a publicized bonus won't pay the bills.

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Response to louis c (Original post)

Tue Jan 30, 2018, 05:42 PM

50. These one time bonuses are solely for optics purposes only

These bonuses are designed to give trump some cover for the massive tax cuts going to the rich. 83% of the benefits of these tax cuts are going to the top one percent.

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Response to louis c (Original post)

Tue Jan 30, 2018, 07:21 PM

52. Exactly. Meanwhile, the employer's 40% tax cut is permanent.

Last edited Tue Jan 30, 2018, 08:12 PM - Edit history (1)

They get a permanent multi-million annual windfall, while the workers get a temporary pittance.

And read all those $1,000 bonus stories carefully. Those bonuses were only for full-timers with over 20 years at the company. Regular hourly workers, the vast majority of workers at the places giving such bonuses (like Home Depot and Wal Mart) got around $150.

It was just for show, to create a propaganda talking point justifying the immoral, reverse-Robin-Hood corporate tax cut.

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