It’s a trend. Carriers are offering higher pay. And there’s also a move toward unionization.
“Verizon raises its minimum wage to $20 an hour” was the headline of an April 18 press release from Verizon. This pay is provided “when base salary plus target commission are combined,” to be clear about the fine print.
T-Mobile CEO Mike Sievert in December announced a nationwide minimum pay at T-Mobile of at least $20 per hour. “This will now apply to every single employee regardless of role, or full-time or part-time status,” Sievert said, adding that “the vast majority of our employees already earn well above this level, especially when including incentive pay.”
Charter is all in. The company on March 16 announced “a minimum starting wage of $20 an hour including target commissions for all employees.” Charter pointed out that this is nearly triple the $7.25/hour minimum wage. The company in 2018 established a $15/hour minimum wage.
AT&T has not made such an announcement, but I reached out to AT&T about this. “Our full-time Mobility customer service employees earn an average of $26 an hour in total pay,” an AT&T official told me. The official stated that AT&T is “the only national wireless carrier with a fully unionized non-management workforce.”
Wage hikes done out of kindness or is this supply and demand?
Since the pandemic broke out in 2020, there has been a shortfall of labor. Help-wanted signs are everywhere. This is basic economics. There is strong demand for labor, but the supply of it is less than before. Companies are having to pay more to attract workers.
Carriers are coping. Fortunately, all carrier stores visited recently by Wave7 Research have been open and functioning, which was not always the case during 2021.
However, a Family Dollar store I visited twice in March was closed both times — on weekday afternoons. During one of the visits, there was a sign saying that the store was “temporarily closed due to short staffing.” So, the retailer invests in millions of dollars of inventory and thousands of dollars in monthly rent, but cannot move inventory because no one has been found to operate the cash register. Family Dollar has a display with low-end Android phones from five prepaid brands.
Recent information from the Federal Reserve Bank of St. Louis shows that the number of unfilled job vacancies has spiked from less that 5 million in early 2020 to more than 11 million now. My barber recently told me that her shop has been short-staffed since the pandemic started, and reps are saying the same thing at my local sandwich shop.
Look for the union label
“Look for the Union Label,” as seen here on YouTube, was an iconic TV ad campaign run by the International Ladies Garment Workers' Union during the 1970s. I have joked with contacts that I took that video recently at a Verizon store. Unionization has been in decline since the 1970s, but there is now a resurgence of interest.
My Verizon joke has a basis. A couple of Verizon stores near Seattle have voted to unionize, the Associated Press reported on April 16. These could be the first Verizon stores outside of New York to unionize. “Employees at multiple Apple stores across the U.S. have taken steps to form unions and bargain for higher pay and better benefits,” CBS News reported on April 22.
The move toward unionization is a broader trend. “Unions are cool again for this generation,” a labor expert told CBS News, as part of an April 24 story. “Unionization efforts are underway at tech companies like Apple and Google; media organizations like The New York Times and Condé Nast; and among grad students, delivery drivers and baristas,” per CBS News.
AT&T aside, unionization is not yet much of a factor at carrier retail. Most carrier stores are dealer stores, and I am not aware of any unionization at dealer stores. Nearly 80% of Verizon stores are dealer stores operated by a third party. A majority of AT&T corporate store reps are part of a union, but only about 30% of AT&T stores are corporate stores.
Was it a coincidence that Verizon announced a $20/hour minimum wage at about the same time as people have been making moves to form unions? This is hard to say, but I think these two phenomena are linked. The tight supply of labor has strengthened the position of workers to seek better pay and benefits.
Costs are up, prices next?
Pricing is up for many everyday purchases, with high gas prices and high car prices as two examples. To date, I am not aware of any hikes in wireless pricing.
However, that could change. AT&T “might have some latitude to raise some prices to reflect the value of its services if inflation continues driving up the cost of other goods and services,” the Wall Street Journal reported on 4/9. The comments were made during the newspaper’s interview of CEO John Stankey. Specifics were not given and the AT&T executive provided a broad context of an inflationary environment. “You’ll probably start to see it over the next several quarters, not just telecom—more broadly in the economy because of the patterns that we’re seeing,” Stankey said.
RELATED: AT&T chief says he’s not happy about how fast wages are rising
During Verizon’s 1Q 2022 earnings call, CEO Hans Vestberg acknowledged the inflationary environment and said that Verizon was planning for various scenarios, including “different types of cost adjustments,” while “looking into what we can do with pricing.”
The lack of price hikes to date is to some extent a testament to the fact that carriers have found ways to contain costs. Vestberg has spoken eloquently about digital transformation, which is in part intended to cut costs and boost efficiency.
Carrier store counts have been falling. Modern networks are more power-efficient. Business model changes have helped, with Verizon's Visible transactions not involving a store presence or retail commissions, enabling unlimited data at a low cost.
Recently, C Spire Wireless launched Solo, a brand with the same business model as Visible.
This is not to say that carriers are exempt from the larger inflationary environment. Wages are rising. Account executives drive a lot, and that costs money.
Competitive responses to price hikes?
If AT&T and Verizon increase prices, that raises other questions. Will T-Mobile follow? What about Xfinity Mobile and Spectrum Mobile? With unlimited family lines at $30/month, they have been reporting record adds. Would they continue apace with this or take advantage of a more favorable pricing environment?
Either way, the labor market is tight, and some in the telecom industry are increasingly considering unionization. Fair warning, though, if you listen to the “Look for the Union Label Song," it might be stuck in your head all day.
Jeff Moore is Principal of Wave7 Research, a wireless research firm that covers U.S. postpaid, prepaid, and smartphone competition. Jeff has 25 years of telecom industry experience, including 13 years of competitive intelligence work for Sprint. Follow him on Twitter @wave7jeff.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.