As America returns to work from the Labor Day weekend and as our country faces an uncertain forecast on jobs for the unemployed, the Department of Justice’s (DoJ) lawsuit to block the AT&T/T-Mobile merger was welcome news given that an estimated 20,000 Americans would lose their jobs if it was approved.
When one carefully scrutinizes AT&T’s track record on jobs and their current posturing over this merger, it is obvious that the company takes a cavalier attitude on how its mergers have affected American workers. AT&T’s track record shows the company cutting over 100,000 jobs over the last decade as it merged with five companies. These cuts occurred even as the company added nearly 60 million wireless lines and 15 million DSL lines over the same period while enjoying substantial wireless data revenues ($18.2 billion, according to their 2010 annual report). In an attempt to show how this merger is different, AT&T pledged to “bring” 5,000 call-center jobs back to the US from other countries once the merger is complete. This last-ditch effort raises two questions:
1. If the company has the ability to bring back 5,000 jobs to America why, in a time of economic uncertainty and no job growth, has it not brought back these jobs already? Perhaps it’s because AT&T doesn’t value American jobs as much as it prefers to eliminate its competition. They didn’t need to play the jobs card before now because they thought they had this merger in the bag.
2. Why does AT&T feel the need to use the possibility of 5,000 American jobs as a negotiating tool to secure a merger? Probably because AT&T smells desperate and realizes it is running out of cards to play. The folks over at Ma’ Bell know politicians’ ears perk up when a company talks about creating jobs in America.
Now, I was not a math major in college (Diplomatic History, represent), but if the merger puts roughly 20,000 people out of a job and AT&T promises to bring back 5,000 jobs from overseas, that’s still 15,000 people who will lose their jobs as a result of this merger. Apparently, AT&T must think that the American public is incapable of rudimentary math. Although, considering how much money they’ve shoved at winning Congress over on this illegal merger (almost $12 million in the first six months of this year), perhaps they know they are pushing a job killer. Ultimately, AT&T could only skirt the truth for so long and the DoJ thankfully did not buy into their false arguments.
One false argument AT&T has made repeatedly is that this merger will create jobs (unlike the five previous times). They even have a “study” to prove it. But a recent white paper by Professor David Neumark, Director for the Center for Economics and Public Policy at the University of California Irvine, found that “there is no basis for claiming that job creation is one of these benefits [of the merger], and the direct effect of the merger is far more likely to be many thousands of lost jobs.” Professor Neumark reaches his conclusion based on a few points. First, the AT&T claim that the merger would create jobs from increases in capital investments is completely unfounded. Second, the merger will likely result in reduced capital expenditures and therefore fewer investment-related jobs. Third, AT&T’s historical track record shows that its acquisitions have led to reductions in wireless industry jobs. Fourth, AT&T’s public statements about the merger suggest it intends to repeat history by cutting wireless industry jobs.
As millions of Americans are unemployed and looking for work and with last month resulting in no net job growth, AT&T’s attempt to exploit these painful times by promising to bring thousands of jobs back to America in return for an illegal merger shows that American jobs are simply pawns in AT&T’s chess game. While the DoJ’s decision will not be part of the President’s job creation speech, the 20,000 T-Mobile workers who received severance packages are likely breathing easier knowing that the Obama Administration will fight to protect their jobs. Hopefully the Federal Communications Commission will follow suit and protect the public interest by killing this job killer.