More companies planning to use tax-cut savings for worker training than salary increases

More companies planning to use tax-cut savings for worker training than salary increases

Companies are more likely to say they're using savings from President TrumpDonald John TrumpO'Rourke: Trump driving global, U.S. economy into recession Manchin: Trump has 'golden opportunity' on gun reforms Objections to Trump's new immigration rule wildly exaggerated MORE's tax cut law to boost capital investments and worker training than to boost salaries, according to a survey released Tuesday.

Consulting firm Korn Ferry surveyed executives at 152 companies with annual revenues totaling $700 billion. The survey found 49 percent of companies said they are planning to increase capital investments at a faster rate, 34 percent are planning to increase workforce training and development, and 14 percent are planning additional increases in base salaries.

“While it is a positive sign that companies are planning to use the tax savings to invest in their people through training and development, the sentiment that compensation will increase as a result of the new legislation appears to not be panning out,” Tom McMullen, global leader of Korn Ferry’s Intellectual Capital for its Rewards Practice, said in a news release.

“Organizational leaders are seeking a better [return on investment] in balancing the allocation of savings into longer-term capital and people investments, such as training, as well as passing savings along to shareholders," he added. "In addition, a number of executives suggested that savings resulting from the U.S. tax cut are likely to be offset by new international trade tariffs.”

The tax law President Trump signed late last year cut the corporate tax rate from 35 percent to 21 percent. No Democrats voted for the measure.

Since the law's enactment, Republicans have touted announcements from companies that have said they are boosting wages and benefits and issuing bonuses, while Democrats have highlighted companies' plans for stock buybacks and dividends.

In the Korn Ferry survey, 32 percent of companies indicated plans for increased dividends, while 9 percent said they have or would be likely to provide one-time bonuses.

The Wall Street Journal, which first reported on the survey, said that the Korn Ferry survey is one of several that have found that much of the tax cut isn't being used to increase wages. The news outlet also cited a survey from Mercer LLC that found that only 4 percent of companies are reporting using their tax savings for bigger paychecks in the coming year, and a survey from Aon that found that 99 percent of companies weren't increasing minimum wages as a result of the tax cuts.

When asked about the Journal article on Tuesday, White House economic adviser Larry Kudlow defended the tax law.

"My reaction is the tax cuts have been an unambiguous success," he told reporters.