J.P Morgan Chase said Tuesday the recent US tax reform and lower regulatory costs allowed it to announce $20 billion in domestic investments over five years, add 4,000 jobs and raise wages. The biggest US bank by assets, J.P Morgan will increase hourly wages by 10 percent on average to between $15 and $18 an hour, depending on market. The change is expected to benefit 22,000 workers.
The bank, which has streamlined its retail footprint in some markets amid rising use of electronic banking, plans to open up to 400 new branches in 15-20 markets in "several" new states. "We are a leader in 23 states, but aren't yet in major markets like Washington DC, Boston, Philadelphia, and many others," said Gordon Smith, chief executive of consumers and community banking at Chase. "Now that we are planning to expand into new markets, we will hire thousands of new employees and help consumers and small businesses in these areas."
Other measures include adjusting health coverage to reduce the out-of-pocket costs of workers and hiring new staff for home lending and small business. Several other large companies, including Apple, Walmart and American Airlines, have announced wage increases or large new US investments in recent weeks following the enactment of tax cuts just before Christmas. But critics of US tax reform point out it could lead to an explosion of the government deficit while most of the benefits will flow to the wealthiest. And despite the recent announcements, many companies are expected to use the tax windfall to increase dividends and for share buybacks, rather than for investments or hiring.
Also, critics note that tax reform has not been a panacea. On the same day Walmart announced wage increases, it said it would close 63 Sam's Club stores in the US, eliminating an undisclosed number of jobs.