"It's Trump's Fault" - US Employers Cut Bonuses For First Time In 7 Years

Tyler Durden's picture

As stagnant wages and rising tuition and medical costs squeeze middle class families, Bloomberg reports that US employers cut employee bonuses this year for the first time in seven years, further straining household budgets despite an ostensibly bright economic outlook. Bonuses slipped a tenth of a percentage point to 12.7% of total compensation this year, according to data from Aon Hewitt, which conducts an annual survey of more than 1,000 employers.

Aon said that while the move may not be dramatic, it's confusing considering the relatively healthy state of the economy. What's more worrying is that the cuts come as part of a broader retrenchment.

“It’s not a dramatic change, but it is counterintuitive,” said Ken Abosch, who heads compensation at Aon Hewitt.


“What’s even more surprising and alarming is that organizations are pulling back their projected spending in 2018,” he added. Companies expect to spend 12.5% of total compensation on bonuses next year, the survey found.

And in the spirit of “the buck stops here,” employers are blaming President Trump for the cuts, explaining that the uncertainty surrounding policies from tax reform to health care is making long-term planning difficult. Fears of an imminent recession have also inspired some employers to pare back compensation spending, risking losing their most valuable employees in the process.

“Despite the strength of the economy, a tight job market, and strong corporate performance, employers have resisted raising wages out of fear of increasing their fixed costs. Those surveyed said they had given out, on average, 2.9 percent raises this year and expect to give around the same next year. The specter of a recession, or even just a bad year, has kept salary increases at that level for the last five years. “There’s just not any appetite to budge on salary spending,” said Abosch. In that kind of climate, the bonus is a much more alluring way to reward workers: It’s not permanent, so companies can choose to hand out bonuses during boom times or withhold them when budgets tighten. Workers who rely on their regular earnings to pay the bills would be justifiably angered by wage cuts, but they may not expect to get a bonus every year.”

And bonuses will likely continue to shrink this year. Ironically, Bloomberg says employers are claiming that Hurricanes Harvey and Irma are forcing them to be more conservative by increasing the chances that inflation could pick up and erode profits. Even after several investment banks warned that the storms could lead to a slight pickup in GDP by increasing construction costs.  

“This year, however, companies are skittish on bonuses, too. Their budgets aren’t tight, but they fear an economic downturn is on the horizon—and specifically, those surveyed said, that greater government spending on defense, infrastructure, and hurricane relief could boost inflation and hurt corporate profits. “Organizations are expressing concerns about how all of that is going to get paid for,” said Abosch.”

Oh, and they’re blaming Congress, too.

“There’s something else giving employers pause on bonuses, too: “The accomplishments, or lack thereof, in terms of congressional results this year, and just some uncertainty about leadership in general out of Washington,” Abosch said. Congress has passed a $700 billion defense funding bill and a $15 billion in hurricane relief, but the passage of tax reform and health care legislation, two Republican priorities that would have a major impact on employers, is far from assured.”

US wages have been stagnant for years even as household wealth has ballooned to a record $96.2 trillion, according to the Fed’s latest flow of funds report."

Unfortunately, the benefits of this increase have largely accrued to the richest Americans, who own the majority of tradeable, and non-tradeable, assets in the US. According to the survey, virtually all of the rise in household net worth has only benefited a handful of the richest

Americans, with the top 10% of the wealth distribution holding 76% of all family wealth.

Because of this, the bonus cuts will almost certainly impact spending decisions made by middle class families, which could have economic ramifications for GDP, given the consumption-focused state of the US economy.

We wonder: With more cuts expected, whom will employers blame next to justify their “frugality”?

Our money’s on Putin.   

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Clock Crasher's picture

You get nothing, it's all there black and white, clear as crystal.

You get nothing!  God day sir!

Clock Crasher's picture


YOU LOSE! Good day Sir!

Manthong's picture


How could we be so far off base here?

It’s the Russian's fault.


ParkAveFlasher's picture

My company cut 401k matching limit this year, will find out in two weeks whether or not they cut budgets as well.

Manthong's picture


“It’s the Russian’s fault.”

Putin… he really still has the KGB at work undermining American Industry, I tell you.

And Lavrov… James Bond has nothing on him.

Haven’t you noticed he orders his Martinis “shaken, not stirred” in perfect English with an English accent?

We need to organize a mass protest at the Russian Consulate in San Francisco ASAP.

And then we need to send Hillary Clinton and John Podesta to Moscow with Hillary’s big red “Easy” nuke launch button and force them to give our Uranium back.


It's OK... it's only the drugs talking.  :-)


Paul Kersey's picture

Maybe it's Kushner's fault:

"Kushner used private email to conduct White House business

The senior adviser set up the account after the election. Other West Wing officials have also used private email accounts for official business."


NoPension's picture

Why not? It's not you get in any trouble for it.

What...is there some kind of law or something against using a private email for .gov business?

Yeah, right. You fuckers almost got me on this one.

NurseRatched's picture

Let me guess- the survey over-sampled NFL teams as "Employers" and the declining bonuses can be traced to slow-moving merchandise.  I hear that Kapernick jerseys are very popular at Dollar General right now.

NoPension's picture


I'm glad to get paid!

ElTerco's picture

"It’s the Russian's fault."

You're right. Trump is likely to blame the Russians. Bad news is always someone else's fault. Good News always means it's something Trump has done.

junction's picture

No soup for you!

Outside of sites like Zero Hedge, all the news you get is propaganda.  Trump now has as chief advisors three generals.  Easily available meth and opioids are wiping out a sizable portion of the population every year.  The drugs all come via protected transport routes run by the military and the CIA. The fact that the "cattle", the middle class, are getting no bonuses or raises is not surprising.  Things are just going to get worse. 

Bobbyrib's picture

"Easily available meth and opioids are wiping out a sizable portion of the population every year. "



CRM114's picture

Annual drug overdose deaths running at 0.002% where I am.

That's about as sizeable as his brain.

ZD1's picture

Fentanyl, Carfentanil, and other synthetic opioids from China are being delivered to the U.S. via the mail. 

TheEndIsNear's picture

You misunderstood. I don't want a link about another scare mongering article, I want a link to where I can by "Fentanyl, Carfentanil, and other synthetic opioids from China". ;-)

WillyGroper's picture

here's the latest & greatest that china is being blamed for.

pretty scary.


Silver Savior's picture

I like how cnbc sees everything is roses. I go there just to see what they are jabbering about then hedge against it. They stupid.

Justin Case's picture

opioids are wiping out a sizable portion of the population every year. Ya gotta burn down the forest to make way for new strong trees.

fockewulf190's picture

"Outside of sites like Zero Hedge, all the news you get is propaganda."

Some of the news on this site is definitely pro-Russian propaganda. The articles from "anti-media", "strategic culture", and others, are all kremlin financed websites and which are dutifully, and routinely, reposted here at ZH forthwith. It's the rarest of days that you will read anything critical here about Russian foreign policy or domestic problems...unlike the truckloads of critical articles posted here which are against the US in both of those categories. I'm not saying there isn't legitimate criticism warranted on some issues, but the one-sidedness is indisputable....and flagrantly obvious.

ZH does it's best work when focusing and reporting on the worldwide problematic economic system, and especially the corruption and fraud within it.

Yen Cross's picture

  LMFAO!   Stocks at ATH and these fucking parasites are still draining the host!

Clock Crasher's picture

This will not stop until every stock, bond and piece of real estate is owned by the Fiat Ponzi Insurgency, their member banks and the Central Bank of the Corporation known as the United States. 

Once that's all transferred they are going to come for the remaining fiat with massive inflation.  That's when they force the People to sell off their children and daughters to the Illuminati Plague Storm for grand ole time. 

In the end it will be a battle to the death between the Police States of the United Banks of America and the 2nd Amendment.

Bladerunning on a knifes edge.  Eternal tyranny or Renaissance.

Justin Case's picture

force the People to sell off their children and daughters to the Illuminati Plague Storm for grand ole time.

Moar pizza?

Richard Chesler's picture

I blame Obondingacare.

Albertarocks's picture
"It's Trump's Fault" - US Employers Cut Bonuses For First Time In 7 Years

This is so incredibly unfair, to blame President Trump when everybody on the planet knows it's the Russians' fault.  Because you know... that's the new religion.  Everything is the Russians' fault.

dchang0's picture

I was hoping they'd reduce the central bankers' bonuses, but of course they mean middle class people with no political connections.

Justin Case's picture

people with no political connections and bargaining units. In stages the corporatocracy will increase the work week, cut over time, reduce benefits to zilch, no mat leave, no sick pay, workman's comp, training programs, no paid lunches, no sick leave/days paid, limited washroom breaks, etc. Just like the good'ol 20's. You'll kiss the ring of the owner each morning to keep yoar job. Asking for a raise is instand dismisal.

JoeTurner's picture

(((Bloomberg))) can always be counted on for the reach around when getting raped in a Barry and Michael sandwhich...

moorewasthebestbond's picture



Bonuses are 12.7 percent of overall pay?


For who primarily? The .01%?

Peak Finance's picture


Lying sacks of fucking shit

Sheep are dumb, but let's face it there not THAT dumb, they see record stock prices for their companies and business going crazy, but they get a shit bonus,  they will KNOW something is up.

If anyone asks me, I am going to say their scumbag piece of shit corporate welfare sucking vampire employer is punishing them for voting Trump.

Silver Savior's picture

My bonus was $209 after taxes.  Atleast enough to get a 10 ounce silver bar that will be worth 10k later. Oh well. Any free money is highly welcome.

Justin Case's picture

My bonus was $12k with a salary $100k, 13 yrs ago.

Codwell's picture

Who in the fuck gets a bonus except banksters and Wall Street churn pricks ? 

Rikky's picture

economy doing great my butt my employer is cutting 15% of the workforce and also slashed bonuses by 15% across the board + purposely lowered performance scores to pay out less.  then the CEO has some town hall event telling us how much he loves the employees and all.  hyprocrites.

Justin Case's picture

Not to worry, soon as the unions are out, the rest will catch up to you, and you'll under cut any third world production costs & jobs will be plenty. Third world will eventually catch up to yoar standards and the playing field will be level for all corporations.

ClickNLook's picture

Soon ... unions are out?

What you suppose the mafia would do after that?

Do Girl Scout cookies sales?

Moving and Grooving's picture

I retired a few years ago, in large part because of the bullshit being shoveled onto the workers there. Just like described above, none of the workers got more than 2% raises for the last 10 years, no one was promoted either - all the moves became 'laterals' - no salary increases. Health insurance became onerous, plus they added all that healh measurement stuff and then started basing your insurance premiums on that.


Fewer people, longer hours, extended travel, it went on and on. And, like you said, the jerks in charge kept handing out cookies and kool-aid while telling us how much they loved us. Assholes the lot. Hope they go bankrupt.