Why Mergers Rarely Create Jobs

WASHINGTON - MAY 11:  AT&T President and CEO R... It’s interesting that sometimes you read about politicians trying to sell a sales pitch that is completely false. In this case, five Democrats are pushing the President to push the AT&T merger through without any regards to the DOJ’s decision, and the FCC’s decision. What’s more is that in their letter, something blatantly jumps out.

Job creation.

I have never seen full-time jobs created for a merger. Granted, there are many jobs that are contracted out. These are usually the same jobs that are let go and then contracted back out for the transition period. There is never an actual merger that doesn’t require some heads being chopped. Just look at Sprint and Nextel. Sprint themselves did a study on this, and having been with one of the vendors that was severely hurt by the backlash of the merger, I can say from personal experience that Sprint knows what they’re talking about. What’s worse is that one of the Representatives find themselves at the top of the list…. from my state. Rep. Heath Shuler (D, NC) is one of the leads on the letter above, trying to point out how many jobs it would create.

Has he not seen that the the Wells Fargo buy out of Wachovia meant that Wachovia laid off people along with temp jobs being created for the transition? Does he not know about the 2,000 jobs that are about to be lost due to the Duke Power and Progress Energy merger?

Sometimes, you have to wonder whether people actually do their homework when serving SIGs. If you’re going to push for someone that isn’t hiding their money trail very well, it’s probably a good idea to not be affiliated with them. In this regards, every party that has been rooting for AT&T has actually had cash donations to their causes.

Outside of antitrust, and monopoly ruling, I believe that AT&T chose the worst possible time to try to pull off this merger. When times were better, it would have probably been a no-brainer for the government to push it through unless they had some severe antitrust issues. But in the state of bad economics when unemployment numbers are even skewed lower than the reality (contractors, and P/T people are not counted in those figures), and people are hurting, they try to roll themselves back into Ma Bell of which was the original antitrust suit that broke them up. The irony.