Former Treasury Secretary Larry Summers on Friday called the bonuses that companies are giving workers due to the Republican tax reform law a "gimmick."
During an appearance on CNBC, Summers, who headed the Treasury Department under President Bill Clinton, was asked to react to several companies announcing bonuses "up to $1,000, in some cases more than that to workers sort of as a one-time thing."
Since President Donald Trump signed the tax overhaul into law last month, nearly 100 companies have announced plans to invest more in their workers—in the form of bonuses, higher wages, or other benefits.
"I think it's a gimmick," said Summers, who served as director of the National Economic Council during the Obama administration.
"I think it's a gimmick," he repeated. "I think that it's a very common device if you want to give somebody some money but you don't want to promise it to them on a continuing basis, you frame it as a bonus."
Summers argued that firms need to raise wages because "the labor markets are tight," so it makes sense for them to "curry favor" with the White House by framing the bonuses and wage hikes as responses to the tax reform law.
Summers then asked why companies are not "committing the bonuses forever" if they are results of the corporate tax rate being cut to 21 percent, which is permanent unless changed by legislation.