T-Mobile’s job creation promises are “sheer fantasy” - House hearing underscores why T-Mobile-Sprint merger against public interest

During a hearing before the Antitrust Subcommittee of the US House Judiciary Committee about the impact of the proposed T-Mobile-Sprint merger, CWA President Chris Shelton and other witnesses and lawmakers highlighted concerns and analysis detailing the harms of the proposed merger on jobs and consumers.

CWA President Shelton delivered testimony that noted “this merger would kill American jobs. We estimate that 30,000 Americans would lose their jobs if this merger is approved. The Wall Street firm, MoffetNathanson, estimates this merger would kill 20,000 jobs. Whether you take their number or ours, you should understand that T-Mobile’s job creation promises are sheer fantasy.”

At several points, T-Mobile CEO and President John Legere attempted to attack CWA’s credibility on jobs and to rely on T-Mobile’s unsubstantiated employment pledges to reassure listeners. But these jobs pledges are filled with loopholes and would not come close to offsetting the 30,000 jobs that would be lost due to the merger. As CWA President Shelton highlighted, 84 percent of current retail stores are owned and operated by authorized dealers who are not encompassed by T-Mobile’s jobs pledges.

President Shelton’s testimony also cited the anti-worker track record of T-Mobile and Sprint, noting: “These are two of the worst companies in the United States when it comes to the treatment of workers. They ship jobs overseas. And in recent years, T-Mobile has been charged with more labor law violations per worker than even Walmart.”

In his opening remarks, Judiciary Committee Chairman Jerrold Nadler (D-NY) captured the stakes of the proposed merger, expressing a “healthy skepticism” about the claims that companies often make to justify a merger: “Merging parties routinely justify anticompetitive mergers under the guise of corporate restructuring, and other so-called efficiencies, which are generally code words for widespread layoffs and reduced wages and benefits for employees. Rather than create more efficient markets, waves of consolidation throughout the economy, over the past several decades, have imperiled the financial security of American workers and consumers.”

And Antitrust Subcommittee Chairman David Cicilline expressed concern about the merger, noting: “It is beyond dispute that this transaction will significantly increase concentration in the wireless market far beyond the level that the antitrust agencies consider to be ‘likely to enhance market power.’ And because of this reality, the only thing preventing the merging parties from raising prices, lowering quality, and depressing wages are promises for a limited period of time.”

• Read a copy of CWA President Chris Shelton’s written testimony to the U.S. House Subcommittee on Communications and Technology of the Energy and Commerce Committee

• Read CWA’s detailed economic analysis on why the proposed T-Mobile/Sprint merger would eliminate 30,000 jobs (find a state-by-state breakdown of projected retail job loss here)

• Read the December 2018 report, Labor Market Impact of the Proposed Sprint–T-Mobile Merger, by the Economic Policy Institute and the Roosevelt Institute, which found that reducing the number of wireless carriers from four to three would reduce retail wireless workers’ wages by up to $3,276 per year.