Fact Check
The Sprint-commissioned report on the impact of jobs of an AT&T/T-Mobile merger is not based in fact
Sprint recently released a report it commissioned by labor economist David Neumark. The report claims to debunk AT&T’s job creation claims. However, the report ignores key facts that show that the AT&T/T-Mobile merger would create and protect tens of thousands of jobs – good news for the American economy and its workers.
Sprint-Commissioned Rhetoric: Sprint hosted a media briefing with economist David Neumark, who authored a Sprint-commissioned report, expressing concern that an AT&T-T-Mobile merger will be bad for American jobs and the economy.
Reality: David Neumark also believes that increasing the minimum wage is bad for the American economy. In an op-ed in the Wall Street Journal, Neumark wrote: “Based on 20 years of research, I doubt there is ever a goodtime to raise the minimum wage. However, with the aggregate unemployment rate at 9.4%, the teen unemployment rate exceeding 22%, and the unemployment rate for black teens nearing 40%, next month’s increase seems like the worst timing possible.” [Wall Street Journal, 6/12/09]
Sprint-Commissioned Rhetoric: An AT&T/T-Mobile merger would almost certainly lead to the elimination of thousands of American jobs.
Reality: An AT&T/T-Mobile merger would create up to 96,000 new jobs, according to a study by the Economic Policy Institute, through an investment of an additional $8 billion in capital expenditures on broadband buildout. [EPI Report, 5/31/11]
Reality: AT&T has made a very public commitment that no current AT&T and T-Mobile call center workers would lose their jobs because of the merger if the transaction is approved; 5,000 wireless-related jobs would be repatriated to the United States; and any workforce reductions will take place first at outsourced sites, rather than U.S. company sites. [AT&T News Release, 8/31/11; Testimony of Randall Stephenson, Hearing of House Committee on the Judiciary, Subcommittee on Intellectual Property, Competition and the Internet, 5/26/11]
Sprint-Commissioned Rhetoric: Massive job cuts resulted from AT&T’s previous wireless mergers.
Reality: In 2002, there were 70,000 employees at AT&T Mobility and its predecessor companies. In 2004, AT&T Wireless merged with Cingular to become AT&T Mobility. In 2007, AT&T Mobility merged with Dobson in 2007 and, in 2009, it merged with Centennial. Today, there are 67,000 employees at AT&T Mobility. The decline in AT&T’s total employment from 2002-2010 was almost totally due to the elimination of wireline jobs. [Source: Individual company Form 10-K's filed with the SEC.]
Sprint-Commissioned Rhetoric: Without the merger, T-Mobile would have made capital expenditures that would have created jobs, as evidenced by the investments they made in past years.
Reality: T-Mobile’s parent company, Deutsche Telekom, announced it would no longer fund network expansion at T-Mobile. Rather, T-Mobile would have to “self-fund” any expansion. As a result, T-Mobile’s capital expenditures will go down in the future. (add Jan 2011 cite for this fact). -In addition, T-Mobile USA President Philipp Humm testified in front of Congress that T-Mobile did not have plans to make investments to upgrade its networks for next generation broadband. [Testimony Before the Antitrust, Competition Policy and Consumer Rights Subcommittee of the Senate Judiciary Committee, 5/11/11]
If you repeat a made-up fact over and over again, will reasonable people believe it?
That’s what Sprint and the critics of the AT&T/T-Mobile merger are hoping. They’ve manufactured a fact, claiming that the AT&T/T-Mobile merger will lead to 20,000 lay-offs of T-Mobile workers. And they are repeating it again and again.
Certainly, with unemployment hovering at a stubborn nine percent, the impact of the proposed merger on jobs today and in the future should be a top concern of policymakers.
The problem is: the critics are just plan wrong. The proposed AT&T/T-Mobile merger is good for workers and good for job creation.
Let’s look at the so-called evidence the critics put forward.
1. They say: AT&T has cut 100,000 jobs over the past decade.
The Real Story: This job loss has been on the wireline side of AT&T, as AT&T lost almost half its landlines when customers cut the cord or switched providers. CWA is not defending job cuts at AT&T, but at least get your facts straight. On the wireless side of AT&T, there has been very little drop in employment, despite multiple mergers. In 2002, there were 70,000 employees at AT&T Mobility and its predecessor companies. Today, there are 67,000 employees at AT&T Mobility. Certainly not evidence to point to massive wireless job cuts at AT&T.
2. They say: Mergers always lead to lay-offs
The Real Story: As we have in the past, CWA will both negotiate and enforce agreements with AT&T to ensure that no AT&T Mobility or T-Mobile occupational workers will lose their jobs. The simple fact is that in CWA’s long experience in working with AT&T on mergers and acquisitions, not one CWA-represented employee has ever lost their job due to that fact.
3. They say: T-Mobile workers will be better off if regulators reject the merger.
The Real Story: There is no future for an independent T-Mobile. T-Mobile is losing customers, with declining revenues and profits, and its parent company put it up for sale. There were two bidders: AT&T and Sprint. Sprint outsources and offshores much of its customer service work and network management. It is notorious for its violation of workers’ rights. In contrast, AT&T is a financially strong company, as the only union wireless company respects workers’ rights, and has a contractual obligation with CWA to eliminate outsourced work before laying off employees.
4. What they don’t say: Investment drives job creation.
The Real Story: AT&T has committed to invest an additional $8 billion – over and above its typical $6-9 billion annual wireless capital expenditure – to build-out high-speed broadband to virtually every corner of the country. The Economic Policy Institute estimates this will create 96,000 jobs. Critics dismiss this important merger-related benefit, claiming that stand-alone T-Mobile would have invested $8 billion. But T-Mobile’s parent Deutsche Telekom announced in January of this year that it would stop funding T-Mobile network investment. An independent T-Mobile would not put the job-creating capital into infrastructure that AT&T plans. Moreover, AT&T’s planned near-universal high-speed wireless broadband deployment will spur the growth of Internet-related jobs throughout America, closing the digital divide, and providing a needed lifeline to rural America.