No free cookies during this flight...
No free cookies during this flight... rypson/gettyimages.com

The recent story in Puget Sound Business Journal on the Alaska Air Group's "special one-time bonuses of $1,000" to its employees to celebrate Trump's deep cuts on corporate taxes is very different from the one in the Seattle Times. The former devotes about 90 percent of the page's space to the bonus: who gets it, when they get it, and what other corporations are awarding bonuses to their employees. American Airlines is one such corporation. Its employees also get one-grand bonuses. This is the rosy part of a story that has many thorns.

The thorns, which are related to the old class struggle between management and labor, briefly appear near the bottom of the story. Here, we learn that a union representing workers at a number of airlines thinks that the "payments fall short of the permanent... $4,000 wage increase it's seeking for American Airlines workers." The PSBJ makes no mention about how the workers at the Alaska Air Group, the fifth-largest airline in the US, feel about the bonus. We can only assume that they are popping champagne bottles, throwing cash at strippers, and stuffing their faces with lobsters.

But if we read Seattle Times, the small bonus is buried in a story about how Alaska Air Group's management is furiously and incessantly cutting costs to meet Wall Street expectations. This vampire-like hunger for cash has demoralized the staff, who fear the company will lose customers and tarnish its reputation. One of the few economic laws you can depend on is this: being cheap always ends up being expensive.

The first striking passage in the Seattle Times report:

In December, flight attendants rose up against the latest small cost-shaving measure that had been planned for January — taking away the free Biscoff cookies on flights leaving after 10 a.m., a move that would supposedly save $3 million per year.

“Man, it’s a race to the bottom,” said one young flight attendant...

The second, and only passage that mentions the bonus:

Interviews with 10 Alaska employees, including pilots, flight attendants and maintenance staff, along with internal company documents obtained by The Seattle Times, reveal a high level of worry about the airline’s direction — concern unlikely to be much eased by the $1,000 employee bonus announced Thursday evening as a result of the corporate tax windfall delivered by President Donald Trump.

The last one:

Still, the newly enlarged air carrier has so far maintained profitability, posting net income of $266 million in the third quarter.

And after management assured Wall Street that it would rein in costs, airline financial analyst Helane Becker of Cowen Equity Research in December made Alaska her top stock pick for 2018.

But if Wall Street starts the year optimistic about a turnaround from last year’s struggles, pilots and flight attendants are deeply dissatisfied, judging by a year-end internal survey.

Much of Trump's tax cut will end not end up in the pockets of workers, but as cash the company uses to keep Wall Street happy and share values up. Once that cash is absorbed, and the equity markets rise, the need for cash will be renewed but at an expanded scale. Soon, cutting free cookies or crisps from the airline's flight offerings will not be enough to meet Wall Street demand. Soon, the management's eyes will fall on capital's eternal enemy—wages, which are already low for a large number of the company's employees.

This is why Trump's tax cut is doomed to fail. Corporations need the cash for shareholders, not for investments. With borrowing costs so low, most corporations use loans for fixed-capital maintenance or improvements and other job-creating expenditures. That $1,000 is nothing but marketing. It will not reappear after the election year, when the tax cuts economy-gutting machinery kicks in.