Did Trump Just Create 8,000 Jobs?
WASHINGTON – Donald Trump gave himself kudos for the creation of 8,000 new U.S. jobs by a Japanese tech mogul, saying it was proof of “the spirit and the hope” stirred by his presidential win.
But for those particular jobs, Trump was basically taking a bow for the second time. The jobs were part of a public commitment made on December 6 by Masayoshi Son upon emerging from the elevator bank at Trump Tower after a meeting with Trump. Son pledged that companies controlled by his firm SoftBank would invest $50 billion in the United States and create 50,000 jobs.
On Wednesday, Trump celebrated the planned creation of 5,000 jobs by wireless carrier Sprint and 3,000 jobs by OneWeb-both companies where Son is a dominant investor.
Speaking from the front door of his Mar-a-Lago resort in Florida, Trump did not outright mention Son’s previous commitment but used the opportunity once again to declare a victory for U.S. workers. Although 8,000 jobs-on their own-are unlikely to dramatically move the needle toward the faster economic growth he has promised, the Trump transition team treated the jobs as a preview of things to come.
“This is just the tip of the iceberg,” spokesman Sean Spicer told reporters Thursday.
Ever the dealmaker, Trump has actively courted and shamed companies. The president-elect has pushed defense contractors Boeing and Lockheed-Martin to reduce their costs via his Twitter account, while he fulfilled a campaign promise by preserving 800 jobs at the Carrier furnace plant in Indianapolis that were previously bound for Mexico.
With the Sprint and OneWeb announcement, there may be slightly less than meets the eye. There is one clear winner, though: Son, worth an estimated $19 billion. Since the presidential election, Sprint stock has soared roughly 40 percent. Son’s SoftBank controls 83 percent of the Kansas-based carrier.
Here are some more facts about the SoftBank commitment.
-Are all of Sprint’s pledged 5,000 jobs at the company?
Of the 5,000 jobs Sprint said it would create or bring back to the United States in its upcoming fiscal year, some would be at outside contractors. The jobs will help “support” its customer service and sales teams, among other divisions at the company. Details about pay and benefits are being finalized, according to Sprint.
The company also said it will discuss with business partners, states and cities about where to create these jobs- but a spokeswoman told The Associated Press that it will not receive any federal, state or local government incentives for adding these positions.
Still, Sprint will likely have fewer workers than when Son’s firm SoftBank acquired a controlling stake in 2013. Sprint has shed about 9,000 employees since 2012; it now employs roughly 30,000, according to annual reports.
– What are the 3,000 new jobs at OneWeb?
Son’s SoftBank invested $1 billion this month in OneWeb, which is building a network of satellites to provide broadband internet. The investment will help finance the construction of a factory in Florida that could produce 15 satellites a week, generating 3,000 engineering, manufacturing and support jobs over the next four years, according to a December 19 statement.
Son linked his investment to meeting with Trump.
“Earlier this month I met with President-elect Trump and shared my commitment to investing and creating jobs in the U.S.,” he said in a statement about the investment. “This is the first step in that commitment.”
– Who are the big winners from this announcement?
In addition to those who get hired for the new jobs, a clear victor is Masayoshi Son.
Trump twice praised the Japanese billionaire in December, signaling that Son might as well have a direct line to the White House. This could be helpful for Son’s other business plans. Under the Obama administration, he saw a marquee deal to merge Sprint with rival T-Mobile fail. Regulators opposed combining two of the four largest mobile telecom companies in the United States. Analysts say a Trump administration would be more likely to approve telecom mergers.
The exposure with Trump has already been lucrative for Son. Before the election, Sprint stock was trading for less than it did after SoftBank acquired the company. At the current price of about $8.80 per share, the value of SoftBank’s stake has risen by more than $8 billion since Trump’s victory. Son founded SoftBank in 1981 and is the company’s CEO, chairman and major shareholder.
– Will this boost economic growth?
The 8,000 jobs sure sounds like a lot. But the U.S. economy is so massive that the figure is basically a rounding error – representing just 0.36 percent of the 2.25 million jobs employers have added over the last 12 months. Ultimately, Trump’s administration will need to introduce policies to generate faster economic growth, rather than securing promises from individual companies. Trump has said that tax reform and regulatory cuts can help lift overall economic growth to 3.5 percent annually, substantially above the 1.6 percent growth expected for 2016.