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JPMorgan Raising Wages After Passage of Tax Reform
While the long-term impacts of the tax reform bill passed by
Congress and signed into law by President Trump remain to be
seen, at least one major corporation is investing some of their tax
windfall into continuing growth. According to U.S. News & World
Report, New York-based JPMorgan is raising hourly employee
wages, hiring thousands of new employees, and opening new
branches around the country.
e Tax Cuts and Jobs Act was signed into law by President
Trump on Dec. 22, 2017, implementing sweeping changes to many
parts of the tax code—and dropping the corporate tax rate from 35
percent to 21 percent. e theory is that this will inspire corpora-
tions to invest more in the United States, to hire more people, and
to pay those people higher wages.
JPMorgan announced that it will increase hourly wages to
a range of $15 to $18 per hour, up from the previous averages of
between $12 and $16.50 per hour. e bank also is planning to open
400 new branches, hire 4,000 new U.S. employees, and reduce
medical plan deductibles for some employees.
According to U.S. News, JPMorgan also plans to increase the
number "affordable" home loans it originates by 25 percent to $50
billion and increase philanthropic donations by 40 percent to $1.75
billion.
Chairman and CEO Jamie Dimon told U.S. News & World
Report, "Having a healthy, strong company allows us to make
these long-term, sustainable investments. We are excited about
further investing in our outstanding workforce and expanding into
new U.S. markets."
e new branches will be rolled out over the next five years
and in up to 20 new markets, according to U.S. News. JPMorgan
currently operates in 23 states, totaling more than 5,000 local
branches.
Although JPMorgan reported a 37 percent drop in profits dur-
ing Q 4 2017, which it attributes to having to write down the value
of its tax-deferred assets after changes to the tax code, rising inter-
est rates will allow the bank to charge higher rates on loans, which
should increase net interest income.
JPMorgan Chase's Q 3 2017 financial reports, released in Octo-
ber 2017, showed the company reporting a revenue of $25.3 billion,
with $6.7 billion in net income for the quarter.
