Congress Tries to Prevent Further Outsourcing of Call Center Jobs

A new bill in the U.S. Congress would prevent companies – which relocate U.S. call centers to overseas locations – from getting often-lucrative federal grants and loans. Businesses which move call center jobs from the United States to foreign countries would not get “direct” or “indirect” federal loans, nor get loan guarantees for five years, according to the proposal.

The legislation – called the “U.S. Call Center and Consumer Protection Act” – would also force employees at overseas call center staff to reveal their location to U.S. callers, as well as let customers be rerouted to a call center in the United States.

The bill was introduced by U.S. Rep. Tim Bishop (D-NY) and David McKinley (R-W.Va.). In addition, it is supported by the Communications Workers of America (CWA (News - Alert)) union.

“It’s common sense that we should not be rewarding companies that ship jobs overseas while millions of qualified Americans are looking for work,” Bishop said in a press statement. “Taxpayer dollars should only be used to incentivize good corporate citizens who create American jobs.”

Customer service/call center employment has dropped from 5.2 million in 2006 to 4.7 million in 2010, according to the CWA. In addition, businesses often have taken advantage of millions of dollars in tax incentives to open call centers in the United States, and relocated operations soon after, according to the press release.

It is true that a number of call centers returned to the United States recently. An example is how US Airways hired 400 employees in the United States, with many of their call center staff members previously located outside of the United States, according to TMCnet.

But still “thousands” of these jobs remain in India and the Philippines, according to the Huffington Post. Labor costs in these countries are less expensive than the United States, and industry officials often point to these lower costs as reason to keep jobs overseas. That leads to lower prices on products, and higher profits that will benefit investors, according to media reports.

The Philippines has the largest number of call centers in the world, with between 350,000 and 400,000 workers compared to India’s 330,000 to 350,000 workers, based on recent media reports. The call center outsourcing industry in the Philippines is projected to jump 20 to 25 percent a year during the next five years according to a story in The New York Times, cited by TMCnet‘s Tracey E. Schelmetic.

“Clearly, the Philippines has become the preferred (call-center) location for companies serving Americans,” John McCarthy of Forrester (News - Alert) Research, told USA Today.

“Congressman Bishop’s bill will help to address a serious issue that has bothered most Americans for a long time,” Michael Gendron of the Communications Workers of America Local 1108 in Patchogue, NY, said in the press statement. “If you are frustrated by dealing with call centers that are located overseas and having to worry about the security of your personal information, this bill will give you a choice to deal with American workers who must comply with American laws.”

The bill would also limit possible consumer fraud and identity theft at call centers located offshore. These overseas call centers “often” lack security precautions found in the United States, says the CWA. In addition, call centers in India will “sub-outsource” work to Egypt, Mexico, the Czech Republic, China and Thailand, “complicating efforts to identify and prosecute fraud,” according to Bishop’s statement.

In 2010, Bishop and others helped to stop the United States Agency for International Development (USAID) from using approximately $10 million to train workers in Sri Lanka for outsourced jobs.