Where Are The Jobs AT&T Promised?
While most of the labor union leadership has decided to blindly
follow AT&T off of a cliff in the company's quest to conquer
T-Mobile, it's refreshing to find that someone who has finally, if too
late, saw the light. He, apparently alone, recognized the value of
AT&T's promises of new jobs if the company gets what it wants. Zero.
Early last year, a California senate committee held a hearing on the
state of telecommunications infrastructure. One of the witnesses asked
in his written statement of Feb. 4, 2011 a question acutely relevant to
today's takeover of T-Mobile by AT&T. Here is what the witness said:
"In 2006, AT&T and Verizon promised major investment in
broadband expansion, video competition, and thousands of new jobs in
California if the state deregulated the video market and passed a
statewide video franchise law, known by its acronym of DIVCA. Well, now
its four years later, leaving the clear questions: Where are the jobs
and where is the high-speed broadband investment?"
Answering his own question, the witness supplied part of the answer:
"AT&T and Verizon have slashed the frontline workforce,
and there simply are not enough technicians available to restore service
in a timely manner, nor enough customer service representatives to take
customers' calls. Let me share some statistics. Since 2004, AT&T
reduced its California landline frontline workforce by 40%, from about
29,900 workers to fewer than 18,000 today. The company will tell you
that they need fewer wireline employees because customers have cut the
cord going wireless or switched to another provider, but over this same
period, AT&T access line loss has been just under nine percent
nationally. I would be shocked if line loss in California corresponds
to the 40 percent reduction in frontline employees.
"Similarly, since 2006 Verizon California cut its frontline landline
workforce by one-third, from more than 7,000 in 2005 to about 4,700
today. I venture that Verizon has not lost one third of its land lines
in the state."
Not to put too fine a point on it, but the witness noted:
"While the workforce of these telecommunications giants has
been decimated by corporate downsizing, over the past three years
AT&T reported $37 billion and Verizon earned over $33.5 billion in
corporate profits. The public suffers, while these companies pad their
pockets."
Who was this wise witness who saw that AT&T didn't live up to its promise of jobs in return for union support for yet another corporate give-away from state government? His name is James Weitkamp, and he is vice president of the Communications Workers of America (CWA) District 9 that covers California.
Official reports
from the California Public Utility Commission (CPUC) back up Weitkamp's
observation. The law that gave statewide video franchises to the
telephone industry also required reporting on employment. The latest
report found that AT&T dropped 16.1 percent of its workforce
offering landline services like telephone, U-verse and DSL between Dec.
31, 2007 and Dec. 31, 2009, going from 29,509, 24,751. On a percentage
basis, Verizon's workforce dropped by a larger number, 23.4 percent, but
they had only 8,110 employees in that video/landline sector to begin
with. Both companies had asked for the employment data to be
confidential, but the PUC turned down the request, saying it would
violate the law to do so.
As Weitkamp correctly observed, CWA is concerned about job loss, and
for his members it didn't particularly matter whether the jobs were
wireline or wireless. Both networks are important, not only to for the
job statistics, but to the future of the state. Noting that both
AT&T and Verizon have told Wall Street they each will cut back their
infrastructure, Weitkamp said the retreat in investment would have
"serious implications" for California's economy. He's right.
History is against the theory of job creation. AT&T's current
record over the last couple of years shows the company is continually
shedding jobs, not creating them.

The only question is why haven't the national CWA leadership and
their colleagues in the labor movement learned the same lesson? Why
haven't active community groups that endorse special-interest
legislation for big business learned that promises of jobs rarely
translate into actual jobs? Promising jobs is easy. It happens all the
time. Delivering jobs is another issue. It rarely happens when big
companies get some giveaway from the government.
And yet, many people are willing to take on face value AT&T's
promise of new jobs, even as the evidence points otherwise. At a CPUC hearing
on July 7, several people testifying said they thought AT&T should
be able to wipe out competitor T-Mobile because of the promise of new
jobs and particularly due to AT&T's practice of hiring minority
workers.
Representatives of African-American, Latino, Asian and Filipino
organizations, ranging from the Allen Temple Baptist Church in Oakland
to the National Hispanic Organization of Real Estate Associates, the
Black Economic Council, and the Asian American Coalition all praised
AT&T for its diverse work force. Many praised AT&T's
philanthropic works in the minority communities in the state.
Interestingly, many group representatives also compared AT&T's
record to companies they said were competitors to AT&T -- Google and
Apple.
As Vince Courtney, representing several unions, said, "We need the
jobs." And yet, AT&T hasn't made any firm commitments to jobs. Those
testifying were banking on AT&T's history and hoping that jobs
would materialize, despite all evidence to the contrary.
It's worth noting, however, that AT&T didn't come by its minority
work force by the goodness of its heart. AT&T had to be sued by the
Equal Employment Opportunity Commission (EEOC) to force the company to
offer advancement to women and to minority workers. It entered into not
one, but two consent decrees, in 1973 and 1974,
and had to provide wage adjustments of about $60 million to 25,000
women and minority workers who had been blocked from advancement and to
agree to a specific plan to open up craft and other jobs.
The union, by the way, tried to block those settlements, claiming
that the settlements in court cases improperly superseded the union as
the bargaining agent for the workers. Judge A. Leon Higginbotham noted in one order that CWA had "remained intentionally aloof" as the process moved forward.
It's also worth noting that in gratitude for all the union support
for telephone company public policies, like opposing Net Neutrality,
Verizon has started negotiations taking what the union is calling an
unprecedented "aggressive agenda" against unionized workers. Any bets AT&T won't follow suit next year when its contracts come up?
As speaker after speaker said, AT&T has created enormous good
will in the minority communities for its contributions to various
organizations. In one statement at the start of the hearing, J. Alfred
Smith, Jr., pastor of the Allen Temple church in Oakland, said only Bank
of America and Wells Fargo provided more support to the minority
community than AT&T.
To be clear, the fact that AT&T should get all the credit in the world for being willing to sped $60 million
doing good works in communities. Their foundation supports any number
of worthy causes. It would be great if other companies had the same
spirit of improvement. On the other hand, the degree to which
recipients feel beholden to support AT&T in its political fights,
even if not explicitly requested, is seriously troubling.
However worthy, AT&T's philanthropy is irrelevant to the discussion of the company's takeover of T-Mobile.
At the end of the three-hour-plus hearing Tracy Rosenberg, executive
director of the Media Alliance, also based in Oakland, said she wanted
to "discourage the idea that this proceeding is a philanthropy contest."
Noting that an earlier speaker had lauded Wells Fargo and Bank of
America for their contributions to minority communities, she said the
role those companies played in today's housing foreclosure crisis
shouldn't be overlooked because of their contributions to communities.
There are impacts "more profound than grants," she said.
This takeover is about losing a major competitor in the fastest growing segment of Internet use. According to a new study
from the Pew Internet Project, about 35 percent of American adults own a
smartphone. Add on the younger population and that equates to lots of
Internet access via wireless.
It makes absolutely no sense for anyone to say they would be better
off with a crucial wireless industry held in the grip of just two
companies controlling 80 percent or so of the business. Developers and
equipment manufacturers, among others, would have no leverage on price,
would see their markets shrink and their profits shrivel. (Here's a more complete takedown of the app-developers-should-love-takeover argument.) To have the vast majority of a market that size shared by two
ginormous competitors, which is what would happen if AT&T takes over
T-Mobile, would seriously harm U.S. consumers, app developers, handset
makers, among others and deal a big blow to the U.S. economy. There
would be only two winners, and lots of losers. CWA in California
recognized that. Maybe others will come around. |