Shhh, keep this under your hat. But just between us, American companies — including many senior living businesses — are suddenly flush with cash. For this, we can thank a massive cut in corporate tax rates.
It’s probably safe to say the savings are translating to a tidy sum at many for-profit communities. But it’s not the kind of good news that operators are likely to publicly flaunt in detail.
What we do know is that among the 180 or so companies in the S&P 500 Index, the effective tax rate dropped by 6% in the first three months of 2018. That means they saved about $13 billion in the first quarter alone, if a Bloomberg analysis is to be believed.
Finally some good fiscal news, right? But let’s not let the unions in on this, OK? Oops, too late. Turns out some of them not only have heard what’s happening but are beginning to ask some uncomfortable questions about where these new dollars might be headed.
In fact, four of them — including the Service Employees International Union — have filed formal information requests with 11 large firms. Specifically, these unions want to know what the respective firms plan to do. After all, many of these same companies have been insisting that for as much as they’d like to offer better wages, they simply didn’t have the financial wherewithal to make that happen. It would appear that a lot of air has just been let out of the balloon carrying that argument.
“Working people deserve to know how their employers plan to spend their tax savings so they can bargain for a fair share of the windfall,” said Chris Shelton, who is president of Communications Workers of America.
One of the targeted companies essentially has replied by telling the unions to bug off.
“Your requests are not relevant to the bargaining relationship,” wrote Randall White, AT&T’s Midwest labor relations vice president.
So it would appear the next management-union standoff is about to begin. And both sides are loading up for bear.
The unions are basically saying: Don’t tell us you can’t afford to pay better wages after you just made a financial killing.
The companies basically are responding with: How we manage our business is not for you to decide.
Well, this ought to get interesting.
John O’Connor is editorial director of McKnight’s Senior Living. Email him at email@example.com.