AT&T plans to lay off up to 7,000 people despite tax breaks, net neutrality repeal

https://motherboard.vice.com/en_us/article/nepxeg/atandt-preps-for-new-layoffs-despite-billions-in-tax-breaks-and-regulatory-favors

Daww, all that extra cash and less regulation and they're still going to lay off people. So much for creating more jobs but rather to fatten them paychecks.


Tax breaks don't directly cause companies to hire, give raises or maintain employment. They cause companies to engage in more economic activity if they see an opportunity to do so that was too marginal before. And that indirectly affects employment and wages. So...

1. If a company is losing money at an activity, it may shut that activity down, even after a tax break. That's in part because maintaining a non-profitable activity wouldn't benefit from a tax break since there would be no income to tax from the activity in any event.

2. If a company can make itself more efficient by cutting expenses, including reducing employees, it will do so even after a tax break. If they save a $1M in expenses that will save them $700-$800k after accounting for the taxes. Tax breaks are not about making companies inefficient.

3. The only thing that will raise wages is a tighter labor market. Companies are not going to pay more for labor than they have to. The fact that wages have not been going up significantly despite our low unemployment rate calls even more into question our economic data. Also, the rise of the sharing economy is also having an adverse effect on the accuracy of those numbers.