Congress passed tax cuts. Will Indy's wages go up?

News that Fifth Third Bancorp plans to raise its minimum hourly wage to $15 following the passage of federal tax reform has Indianapolis workers wondering when they are going to get their raise.

"We have to applaud employers who choose to share their windfall with employees — because it's the right thing to do," said Stuart Mora, union organizer for Unite Here in Indianapolis. 

"But the reality of the world is that the majority of employers won't do that out of the goodness of their heart if working people don't stand up and fight for their share of it." 

The sweeping Republican tax overhaul, passed by Congress Wednesday, includes a 40 percent tax cut for corporations that proponents say will spur economic growth.

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Fifth Third, AT&T and other companies said they would boost pay for workers.

Fifth Third President and CEO Greg Carmichael said the tax cut gave the bank an opportunity to re-evaluate what it pays employees and share some of the savings. Nearly 3,000 workers will see hourly wages rise to $15. Others will receive a $1,000 bonus. 

“We want to invest in our most important asset — our people,” he said. “Our employees drive our reputation, our business and our success.”

The last time the federal government raised the minimum wage was in 2009 to $7.25 an hour.

Alysia Prunier, a 32-year-old executive assistant at Fifth Third's Downtown campus, said she plans to use the $1,000 she was awarded for a down payment on a house. 

"My husband and I just moved back from Toledo. and we've been saving for a home," said the Noblesville resident who has worked for the company for about six years. 

Prunier, who has two children, said she was shocked when the company decided to pass part of its tax windfall onto its employees. "It's a big deal — it's nice to see," she said. 

More than 620 Indiana employees will receive a $1,000 bonus, said Steven Alonso, Fifth Third's Indianapolis group regional president. 

AT&T was the first company to go public this week with its plans to pass along coming tax savings to workers. The company said it would pay a $1,000 bonus to more than 200,000 of its non-management workers.

Not all companies that benefit from President Donald Trump's tax plan will provide wage increases, however.

Kevin Brinegar, president and CEO of the Indiana Chamber of Commerce, said some companies may decide to put more money into their products and services to stay competitive or pass the tax break onto investors. 

In all of these situations, Brinegar said,"this will have a positive impact on the economy and workers."

Supporters have said the cost of reducing tax collections by $1.5 trillion over the next 10 years would be offset by an explosion of economic growth, but some economists have called those projections overly optimistic. Non-partisan estimates project the tax bill could add $1 trillion to the national debt over 10 years, and laws designed to prevent deficit spending could force cuts to popular programs such as Medicare.

In a study released Monday, the Tax Policy Center, a nonpartisan think tank often cited by Democrats, concluded that the top 1 percent of taxpayers, those making more than $732,800, would get 20.5 percent of all the benefits in the tax bill next year.

Mora, whose union consists of custodians and other service workers, hopes that the tax plan announcement will encourage more workers to stand up and ask for a raise, whether collectively or individually.

If companies do not offer raises, he says, "the medium- to long-term effect is going to be a widening of the gap between rich and poor and more middle class families being poorer households."

Unions have been pushing for raises for workers since the tax plan was announced. 

Last month, the Communication Workers of America, the union that represents many of AT&T's frontline workers, had demanded that employers guarantee the yearly $4,000 household wage increase that Republican lawmakers asserted would be the outcome of the tax cut. 

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Indiana lawmakers have tried to increase the minimum wage to $15. 

Last legislative session, Sen. Frank Mrvan, D-Hammond, submitted a plan of raising the minimum wage to $15 an hour, indexed to inflation.

The bill was referred to the Committee on Pensions and Labor, chaired by Sen. Philip Boots, R-Crawfordsville. Boots told IndyStar last year that the committee did not plan to hear Mrvan's bill.

One tool to see the impact of a higher minimum wage is the MIT Living Wage Calculator, which only covers the necessities of life. 

The calculator suggests a $15 minimum wage would fall short of a “living wage” in Marion County for the living expenses of an adult and one child. According to the calculator, $21.43 is an appropriate living wage in Marion County. 

USA Today contributed to this article. 

Call IndyStar reporter Fatima Hussein at (317) 444-6209. Follow her on Twitter: @fatimathefatima.