The truth about AT&T’s $1,000 bonus for workers

"This is a drop in the bucket compared to what was promised."

(CREDIT: AP Photo/Paul Sancya)
(CREDIT: AP Photo/Paul Sancya)

AT&T chairman and CEO Randall Stephenson announced on Wednesday that his company would be giving out $1,000 bonuses to some 200,000 employees as a result of the recent tax bill passage — but union officials representing those workers say the situation is far more complicated than AT&T is letting on.

“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” Stephenson said. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”

According to a company statement, the bonuses apply to “more than 200,000 AT&T U.S. employees — all union-represented, non-management and front-line managers.”

The company has said it also plans to invest an additional $1 billion in the United States in 2018, following through on previous comments officials made in November.

AT&T’s latest announcement comes on the heels of a December 14 agreement struck between the company and the Communications Workers of America. The union agreement, if signed by January 12, will afford 21,000 CWA union member employees a 10 percent raise and a $1,000 lump sum, in addition to the special $1,000 bonus announced this week.

However, a CWA spokesperson noted in an email to ThinkProgress that AT&T executives had agreed to the special bonus only after CWA argued that its employees should be given the “$4,000 wage increase promised by the Republican corporate tax cut.” CWA officials also reached out to CEOs at other corporations where its members work, like Verizon and American Airlines, to make their case.

“Republican leaders have promised that households would receive on average, a yearly $4,000 wage increase,” they wrote. “They also claimed that the corporate tax plan would produce new jobs in the U.S. as companies return work from offshore.”

They added that the $1,000 bonus was “a drop in the bucket compared to what was promised.”

If President Trump signs the tax bill before Christmas, employees will receive the bonus over the holidays, the company said.

AT&T’s announcement appears to be an olive branch to the Trump administration, whose Justice Department recently sued to prevent the company from a massive Time Warner takeover worth $84.5 billion. President Trump himself has stated that he’s no fan of the merger.

“Personally, I always felt that was a deal that’s not good for the country,” he told reporters in November.

Those comments hearkened back to statements Trump made on the 2016 campaign trail.

“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” he said during a campaign event in October 2016. “…Deals like this destroy democracy.”

The Time Warner/AT&T merger, which has been in talks for more than a year, “seemed destined to close by the end of the year”, according to The New York Times. But negotiations hit a roadblock in early November when tensions between Justice Department officials and company executives went public. At the center of that conflict was CNN, which the president has often blasted as “fake news.”

As the Times reported,

In one account of the meeting, Justice Department officials called on AT&T to sell Turner Broadcasting — the group of cable channels under the Time Warner banner that includes CNN — as a potential requirement for gaining government approval, according to three people from the companies involved, who spoke on the condition that they not be named because of the delicacy of the negotiations.

Or, the people said, AT&T could sell off DirecTV, the satellite television provider that it bought two years ago for nearly $49 billion. But AT&T and Time Warner executives say privately that such a concession is not realistic, given that DirecTV and its DirecTV Now streaming service would be crucial to a combined AT&T-Time Warner.

Later reports claimed that CEO Stephenson had offered to sell off CNN in return for Justice Department cooperation on the merger, though Stephenson himself denied that claim.

The DOJ filed a lawsuit to block the merger on November 20.

“We believe, and our investigation has found, the merger would harm competition, resulting in higher bills and less innovation for millions of American consumers,” an official stated at the time.

AT&T’s general counsel fired back, stating, “Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market. We see no legitimate reason for our merger to be treated differently.”