CVS Health will use a portion of corporate benefits brought by the passage of the Tax Cuts and Jobs Act to increase wages for hourly employees and offer paid parental leave to full-time workers, according to CNBC.
The healthcare company, which has over 240,000 employees, will boost starting hourly pay to $11 an hour from $9 an hour, and full-time employees will be offered up to four weeks of paid parental leave.
In response to decreasing unemployment rates and a tightening labor market, many companies have announced bonuses and benefits for employees, results praised by President Donald Trump after the tax bill’s passage last year.
Our big and very popular Tax Cut and Reform Bill has taken on an unexpected new source of “love” – that is big companies and corporations showering their workers with bonuses. This is a phenomenon that nobody even thought of, and now it is the rage. Merry Christmas!
— Donald J. Trump (@realDonaldTrump) December 22, 2017
The announcement of wage increases at CVS and other companies, including Walmart, have been criticized by some, as they have argued that temporary bonuses are not enough to offer lasting benefits for the middle class.
The move comes as CVS’ fourth-quarter results exceeded expectations, and it prepares for a shareholder vote next month on its proposed $69 billion acquisition of health insurer Aetna.
Earnings for the pharmaceutical company included a $1.5 billion benefit from the tax bill, but retail sales have continued to disappoint.
“As much as CVS is forward thinking and innovative in health, it is an extraordinarily unimaginative and backward-looking retailer,” said Neil Saunders, managing director of GlobalData Retail, according to CNBC.
“This is one of the reasons why front-of-store sales are still in negative territory despite very weak prior year comparatives and a boost to sales from remedies for a particularly nasty flu and cold season.”