
AT&T promised 7k new jobs to get tax break, cut 23k jobs instead - JaimeThompson
https://arstechnica.com/tech-policy/2019/05/att-promised-7000-new-jobs-to-get-tax-break-it-cut-23000-jobs-instead/
======
natpalmer1776
The main issue here is that AT&T employs a large workforce that is not
relevant to the current (Fiber) and upcoming (5G Cellular/WISP) service
technologies being rolled out en masse.

Which means as their legacy business units are retired or pulled back, they
are letting go numerous employees while simultaneously hiring a slightly
smaller number of more educated (up-to-date) workers to staff up their new
business units.

What we are seeing here is the decline of a historically booming industry
(linemen) as the overhead required to maintain these networks becomes more
specialized in nature and involves fewer people than before.

Now, the ethical strategy to mitigate impacting their historically loyal
workforce would be to re-train the copper linemen to work with the new
technologies.

The problem with this is that its' expensive. Insanely expensive. The training
is made available to many of their current workers, in as many areas as
possible (where the skills will be relevant) however at the end of the day an
individual 'first-line' manager will not advocate for 64 year old Joe Schmoe
with average performance stats to get this expensive training if 24 year old
Billy Bob with a 'young man's' performance record is also asking to get
trained.

~~~
Spooky23
That’s a scenario they created. There’s no reason the man in the van can’t
hang up a WISP device or whatever. I used to run a field tech services org —
it’s not that expensive to train new tasks, the hardest thing is hiring
reliable people. Your old school HP and IBM CEs would service everything for
95% of service calls.

They are busting the CWA, period.

The same thing happened with National Grid in upstate NY. They’ll use 5
subcontractors and 10 guys to do a job that was handled by a 2-3 man crew 20
years ago. The hilarious thing is that that union didn’t have the stupid
separation of duty stuff the contractors do. I saw one instance where they had
a subcontractor on site specifically to spray bee spray.

~~~
300bps
_the hardest thing is hiring reliable people...They are busting the CWA,
period._

My father in law was a linesman for AT&T, then the various Bell companies then
Verizon for 30 years. He started when he was 21 and retired when he was 51
about 15 years ago.

He regularly brags how the union would set hour allotments for each job and
how he could complete work in 30 minutes that the union required scheduling
for 5 hours. Most of the time he spent on the clock involved him hiding his
work truck in the woods behind his house and sneaking into his house to work
on home improvements while he was being paid.

Every once in a while he would get caught doing something wrong and would be
suspended. The union would then represent him and provide him groceries and
other items during the suspension. Eventually Verizon paid him a lump sum of a
quarter million dollars to go away which along with saving money from decades
of generous overtime rules including double time and a half on holidays let
him retire at the age of 51.

~~~
petee
There will always be people who abuse the support the union offered, like your
dad, who gives unions a bad rep - most members work with pride and want to do
the best job they can.

Time allotted work is intended to ensure jobs are done safely; not everyone
will take that long, but it ensures slower workers aren't going to cut corners
just to keep schedule. Without a union, your dad would have been expected to
take 30min every single time, and lose your job if you don't.

~~~
wdn
Union is bad.

Just put into perspective.

In the Garden State Parkway in NJ, the Union Toll Plaza has 4 lanes that
accept exact change. No people involved. Then few months ago, they "upgraded"
the exact change lanes and put people to collect tolls, 24/7\. Not to mention,
it takes longer to pass the lane now if you need to pay cash.

That means, at 40hr/week per person, 168hr per week, they need 16 people to
run this 4 lanes. Then another 2 to 3 people to cover for time off. Assume a
low $50k per person/year, that's almost $1m per year.

What values do these toll collectors provide to society? The only reason why
these jobs were created in the first place is because of the union. Don't you
think money and manpower can spend on something better to serve the customers?
Like repairing the road.

~~~
ahallock
The fact we have toll roads at all is concerning, considering this is a common
argument against privatization. Toll stops are also pretty dangerous,
especially the ones on the West Virginia Turnpike, which recently doubled in
price. What can we really do, though?

~~~
gpm
The fact that you're using toll booths to collect tolls is the concerning part
to me. Here in Toronto we have a toll highway where everything is automated.
Via cameras/license plate if you only drive on it occasionally, or via a
transponder if you drive on it often enough it's worth the discount (I assume
the discount exists because the cameras are unreliable, sometimes miss people,
and they want to minimize errors).

~~~
StudentStuff
Plate recognition has a fallthrough rate, and mailing out toll bills followed
by processing incoming checks is a costly PITA that a transponder enabled
vehicle mostly eliminates.

------
lovich
Did anyone really expect anything different? These are the same companies who
took tax breaks in return for a promise to build out a fiber optic network and
then never did it while pocketing the money.

At this point AT&T and their peers aren't fucking society, we are actively
asking them to

~~~
rayiner
This article and your assertion are a really good example of how falsehoods
become an unquestioned part of the accepted narrative. AT&T never "promised to
create a _net_ 7,000" jobs. The article admits as much: it quotes AT&T's CEO
as saying that AT&T would invest an additional $1 billion, which is equivalent
to 7,000 jobs. The article _never analyzes the truth of that claim._ It never
determines whether AT&T actually invested that money. (In fact, AT&T is in the
middle of a big push to deploy more fiber:
[https://www.cordcuttersnews.com/att-plans-to-expand-fiber-
in...](https://www.cordcuttersnews.com/att-plans-to-expand-fiber-internet-
to-14-million-locations-by-mid-2019.)) Instead, the article points to
completely unrelated layoffs that resulted from a merger. (There was also the
question of who exactly this "promise" was made to. The article quotes
Stephenson's comments in a speech to the Economic Club of New York, not any
sort of filing to the government.)

The same is true for the "promise to build out a fiber optic network." AT&T
never "promised" to do that. The arguments at the time were that deregulation
would lead to higher investment into things like broadband. What nobody
anticipated at the time was that the mobile revolution would happen, and all
that new capital would be redirected to building wireless networks instead.
That doesn't make the original claim a misrepresentation. And from a practical
standpoint, it's better that all this money got invested in mobile instead of
building FTTH.

~~~
lovich
Yea, you're right. AT&T never promised those jobs. They just kept talking
about all the jobs that would be made if the tax cut happened. That was the
main argument when they tax cuts came up, all the job that would be created.
But yea, no one made an actual promise.

The reason people are upset is the same reason no one likes talking to lawyer,
and why no one wants to deal with corporate or political leaders who need to
be talked to like a genie to make sure your wish doesn't get twisted around.

If the response to this event and to the fiber optic debacle is "wElL
tEcHniCalLy We DiDnT pRoMiSe" then why should any tax breaks be considered in
the future for any company? What is the reason to believe any statement about
the benefits that will come through if we could just release these poor
corporate giants from their terrible tax burden, if experience shows that they
never come through?

~~~
javagram
> why should any tax breaks be considered in the future for any company

Unemployment in the USA after the tax cuts is at historically low levels that
haven’t been seen in more than four decades. The economy is booming.

Taxes on corporations are mainly good to encourage corporate behavior, revenue
can be obtained by taxing the wealthy directly as well. Increasing taxes such
as the capital gains tax while keeping corporate taxes at their reformed,
globally competitive levels seems the way to go to me...

~~~
Frondo
With 1 in 8 Americans living underneath the federal poverty line, and 10% of
employed American adults facing food insecurity (i.e. hunger), it's arguably
not the case that the economy is booming.

As for what you can credit the tax cuts with, well, here you go:

[https://www.marketwatch.com/story/its-official-the-trump-
tax...](https://www.marketwatch.com/story/its-official-the-trump-tax-cuts-
were-a-bust-2019-01-30)

The tl;dr: share buybacks and corporate profits are the biggest consequence of
the TCJA, not employment.

~~~
javagram
I don’t see what those two statistics have to do with whether the economy is
booming.

Would you argue the economy has never boomed before? 1 in 8 Americans below
the federal poverty line seems to be pretty decent when seen historically
according to
[https://commons.m.wikimedia.org/wiki/File:Number_in_Poverty_...](https://commons.m.wikimedia.org/wiki/File:Number_in_Poverty_and_Poverty_Rate,_1959_to_2017.png#mw-
jump-to-license)

Numbers for 2018 don’t seem to be available yet but I’d assume they continue
to trend down.

~~~
fulafel
Another view is that the US is as bad as ever compared to peers:
[https://www.statista.com/statistics/233910/poverty-rates-
in-...](https://www.statista.com/statistics/233910/poverty-rates-in-oecd-
countries/)

~~~
fuzz4lyfe
Mexico has lower rates of poverty than the US? It wants me to pay to see how
they gather the data but 33% of Mexicans live on less than $5 a day[0] while
"42% of Mexico's total population living below the national poverty line" yet
the rate in your graph is 16.7%

[0]
[https://en.wikipedia.org/wiki/Poverty_in_Mexico](https://en.wikipedia.org/wiki/Poverty_in_Mexico)

~~~
fulafel
It's true that the oecd definition kind of breaks on poor countries with low
median income. But still the list is interesting if you look at the more
comparable rich countries vs the US.

------
KorematsuFred
"Jobs" as a political issue to bargain vote is the real problem. Finally the
voters ask their representatives "what you have done for jobs?" It is that
misplaced attitude of voters that eventually gives us these evil policies and
pretty much nonsensical claims like "someone else is taking our jobs".

Every company out there is trying to employ more people. The only problem is
in finding people who are a right fit, who have right skills and so on. The
problem becomes more acute in a country like USA where economy is always in
optimal mode. Everything you get in USA is mostly state of art requiring
specialized skill.

Government has zero role to play in "creating jobs" or "attracting jobs". If
government gets into that it will end up with corruption with 100%
probability. Government however can play a big role in ensuring people have
skills. Government is the only entity that can publish macroeconomic data
about skills and shortages, Government can help universities and community
colleges and private entrepreneurs develop those skills.

~~~
gridlockd
> Every company out there is trying to employ more people.

That isn't true, many companies have far too many employees relative to the
size of their business. Companies grow much in the same way that bureaucracies
do (see Parkinson's law). Firing people isn't necessarily easy, but it can be
very profitable.

> The only problem is in finding people who are a right fit, who have right
> skills and so on.

Don't forget price.

> Government has zero role to play in "creating jobs" or "attracting jobs".

It has a massive role in increasing the price and risk of hiring people.
Corporate taxes also directly affect the risk/return calculations for new
investment.

This article makes it sound like AT&T execs lied about creating jobs, but they
de-facto didn't. Creating 1000 jobs through investment doesn't imply _not_
getting rid of 1000 other jobs through restructuring. Of course you're not
going to be boasting about planned layoffs in the same breath, at least not to
the press that serves the general population.

------
rootusrootus
How about next time we want to give a company a tax break to incentivize job
creation, we make it a rebate payable in five years, contingent on the jobs
actually being created.

Of course, that assumes 1) that giving a tax break is actually an effective
mechanism for creating jobs, and 2) that the people involved are not corrupt
to begin with. I'm not sure either is a safe assumption.

~~~
jayd16
How about focusing on public works so at least we get some contractually
obligated public infrastructure out of the stimulus.

~~~
beenBoutIT
The border wall obsession on one side and Trump investigation obsession on the
other have replaced any possibility of focusing on infrastructure.

~~~
jayd16
The Dems are talking about a Green New Deal for exactly this type of public
works while the GOP has passed tax cuts and tariffs. Even if you assume the
Democrats are all talk, the equivalency is a false one.

~~~
ben509
Ironically, the GND highlights why, as Obama put it, "there’s no such thing as
shovel-ready projects." [1]

In a nuthsell, environmental regulations and activism make large public works
projects nigh impossible.

What's surprising is mostly that this is even a surprise. If environmentalists
have been clear on anything, they've been clear that they don't like massive
concrete and steel structures. It blows my mind that the Dems are going to try
this again, when they're getting the mailers from Sierra Club promising to tie
up these public works projects in court for 20 years.

[1]:
[https://www.nytimes.com/2010/10/17/magazine/17obama-t.html](https://www.nytimes.com/2010/10/17/magazine/17obama-t.html)

~~~
jayd16
Pretty sure environmentalism is not what's causing right of way sand bagging
and foot dragging on our phone poles and it's not what's standing in the way
of fiber rollouts and other information infrastructure.

------
tpurves
I've heard this story before. Friend of mine runs a small manufacturing
business in Canada. Got subsidized by a Canadian government program to import
and install a big new modern machine for his shop floor from Germany. Goal of
the gov program obviously being to create manufacturing jobs. And sure enough,
3 new and good union jobs required to operate the new thing, and because the
new thing is so modern and highly automated, he was able to lay-off 20 other
workers it took to run the older machines it replaced...

~~~
rchaud
Was the explicit purpose of the grant to increase employment? Or simply make
the business more competitive with advanced machinery? These agreements can be
set up such that the grant need not be repaid only if the business creates X
full time jobs over a period of Y years. If that condition isn't met, the
grant is repayable.

------
rconti
Coincidentally, AT&T just strung fiber up on my street in late March, about a
week or two after Sonic announced they'd be rolling their own.

For the past 3 weeks I've been happily using un-capped symmetrical gigabit
fiber provided by AT&T, and re-sold by Sonic.

Once Sonic rolls theirs later this year, I'll immediately switch to them and
save another $40/mo. As if I needed more incentive to make sure no more
dollars flow into AT&T and other incumbent utility providers.

------
randyrand
For all we know they would have otherwise cut 30,000?

I don't think we should be enacting laws based on promises anyway. The effects
of tax breaks are reasonably well understood without the need for promises.

------
ben7799
I had a Software Engineering contract at Verizon around the time Fios was
starting up.

Verizon went through/is still going through the same thing.

The companies are a bit sketchy but the whole mismatch in workers is a real
thing. They had lots and lots of unionized 55+ blue collar guys who couldn't
even login to a computer and had near zero interest in learning. It always
felt like the union was trying to fight for the status quo as opposed to
trying to facilitate moving forward.

So it gets to look real attractive to try and get them to retire early and
hire some young guy since the job requirements have switched to needing lots
of computer skills.

The whole tax part.. that's just standard "Be as evil as possible." Given the
whole "Be as evil as possible part" the union does become very necessary.

------
throwaway55554
When does AT&T never break a promise?

They broke promises here.

They broke promises with Time Warner merger.

They promise broadband speeds and deliver dial up speeds.

They promised raises after the tax break and only gave bonuses.

They promised to stop selling location data and kept doing it.

They promised 5G and only gave us 5Ge. (Ok, that ones a joke).

I mean, Randall is a master at lying on the scale of Zuckerberg.

There's lies, damn lies and then AT&T saying, "hold my beer!".

~~~
throwayEngineer
Can we stop letting the government make deals? They are doing a terrible job.

When AT&T couldn't maintain connection at my home, and wasted 3 half days
fixing it, and didn't fix it, I stopped doing business with them.

This is a failure of government making one sided deals.

------
godzillabrennus
The CWA union quoted in this article has been fighting its diminishing power
for years.

About 10 years ago I spoke with them about DSLAM vs IP DSLAM tech. The
contracts they had were only requiring union techs be used for equipment that
didn’t use internet protocol. They didn’t like what I had to say about IP
DSLAM.

------
ausbah
Do these tax breaks not have any regulatory teeth? "If you fail to do X, you
must pay us back."

~~~
zanny
Corporate welfare, by design, is not meant to be accountable.

~~~
Arbalest
The funny thing is, incentives for startups here seem to have all sorts of
requirements which are enforced. Seems like "Once you get big enough, we trust
you" but then how did they get big in the first place?

------
olliej
Why aren’t tax breaks like these ever made absolutely conditional on companies
doing what they’ve said they would do?

Eg if you say you’ll do X in exchange for a tax cut, and don’t do it then they
have to pay back those taxes, with interest (otherwise there’s little
downside)

~~~
javagram
They are when they are intended for a specific purpose. E.g. tax credits for
jobs are often given to companies like amazon in exchange for locating their
HQ in NoVA . If the deal falls apart the credits automatically vanish or
reduce proportionally.

This tax break was a general reduction in the corporate tax. It applied to
every company in America and wasn’t created in exchange for a specific
promise. The concept was that we switch our US tax rate to a globally
competitive rate, while also getting rid of the incentives for companies to
shelter money overseas rather than spend it in the US after being double
taxed.

------
RIMR
Does anyone here actually buy the "giving the rich more money lets them create
more jobs" BS anymore?

Hasn't trickle-down economics been thoroughly disproven at this point?

------
aeturnum
I'm sure that AT&T will helpfully explain that they hired 7,000 people and
laid off 30,000 people for totally unrelated reasons.

------
wnevets
How much more proof do we need a sociality that tax breaks to create "jobs" is
just a scam?

~~~
throwayEngineer
You will always have masses of people that think government can create jobs.

It's not a fact driven problem.

It's that companies will pay the members of a political party to create
special interests.

I don't know the best solution, but I certainly don't trust the federal
government to be the solution.

------
cosmic_ape
If that's true, isn't there some organization in the government that can sue
them for this?

~~~
javagram
The Republicans came into power promising to push a tax break from the
beginning of the campaign. It was a crucial part of the 2016 campaign and
their promise to voters.

They aren’t going to sue AT&T over a non-legally binding statement in a speech
nor would they have legal standing to do so even if they wanted.

------
xof711
AT&T is just another big Corporation, not a person! Why would we expect them
not to do what best for the shareholders vs. what good for its employees???!!!

