Nationwide employees receiving $1K bonus

A growing number of workers — including most Nationwide employees — are getting to share the wealth from the new federal tax law.

Since the legislation was signed by President Donald Trump before Christmas, a number of companies have announced plans to raise their minimum wage or give bonuses to workers.

Nationwide became one of the latest companies to do so, announcing Wednesday that it will give a $1,000 bonus to

all but its highest-ranking executives. It also will increase the company match for its 401(k) retirement-savings plan.

Overall, companies stand to benefit significantly from the tax legislation, which will permanently cut the corporate tax rate from 35 percent to 21 percent.

“Nationwide values its associates. People are at the core of our company values,” the company said in a statement. “The combination of the new tax legislation, including a reduced corporate tax rate, and our associates’ ongoing commitment to our members ... are the reasons we’re making this investment that further enhances the already robust benefits we offer to attract and retain the best talent.”

The $1,000 bonus at Nationwide will go to 29,000 of the company’s 33,000 workers across the country. The money will be part of their pay on Jan. 19.

The company also will provide a 50 percent match on the first

7 percent of what a worker puts into his or her 401(k) plan. That’s up from 6 percent.

Other companies, including several with significant operations in central Ohio, have announced similar plans. Some have said they also will raise their corporate minimum wage to $15 an hour, invest in their operations or donate money to charitable causes.

Among them: PNC Bank, Fifth Third Bancorp and television company Sinclair Broadcast Group, owner of WSYX Channel 6 and operator of WTTE Channel 28 and WWHO Channel 53. Cincinnati-based First Financial, which has operations in central Ohio, said Wednesday it is raising its corporate minimum wage to $15 and making a $3 million donation to its newly established foundation.

About 75 percent of employees at Fifth Third will get a raise to $15 an hour or a $1,000 bonus.

“We want to invest in our most important asset — our people,” said Greg Carmichael, the bank’s president and CEO. “Our employees drive our reputation, our business and our success.”

“At the Columbus Chamber, our members say this tax-induced windfall will help them complete ‘wish list’ items that have been lingering on the back burner,” said Don DePerro, the chamber’s president and CEO. “Some will indeed invest deeper in hiring new employees as well as compensating others who are paid below industry standard.”

Corporate tax cuts put more companies in a position to do something for workers at a time when a low jobless rate is starting to force up wages, said Mark Vitner, senior economist and a managing director at Wells Fargo & Co.

“I think it is meaningful,” he said. “A lot of companies wanted to do something sooner, but they haven’t been in a position to do so.”

Many of these companies do most of their business in just the U.S. and pay among the highest corporate tax rates, he said.

“The real benefit to the economy is that the capital being freed up

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likely will to be put to more-productive use. ... Some of that capital will reward human capital,” he said.

The raises and bonuses will make up just a portion of what companies will get from tax reform, he said. Companies also figure to make capital investments and buy back stock and increase dividends.

“Bonuses are great,” he said. “More importantly, (the tax cuts) will encourage businesses to make fixed investment. That’s very important to the Midwest that produces a lot of industrial equipment.”

For low-wage workers, even a tiny wage increase is significant and may not be all that costly to their employer, said Andrea Applegate, president of Applegate Talent Strategies in Columbus.

“Raising the minimum wage has a huge impact on low-wage workers,” she said. “A small increase makes a big difference. Low-wage workers will chase that.”