Friday, June 22, 2012


Outsourcing of call centers threatens jobs, the economy, and data security

by Larry Geller

[Today] seven T-Mobile call centers facilities in six states are closing, affecting 3,300 American workers.

The news also comes on the heels of a Republican-led vote against advancing legislation that would revitalize the domestic call center industry and strengthen consumer protections against security problems continually seen in overseas call centers.

[CWA, ICYMI: Mitt Romney Pioneered the Off-shoring of Call Center Jobs & Why it Matters, 6/22/2012]

As a long-time T-Mobile customer, I am very concerned about who has my credit card and other personal information. It appears T-Mobile will no longer be able to protect my data from identity theft—they’re giving it away to an overseas company—and costing 3,300 Americans to lose their jobs.

The outsourcing of call centers is back in the news, with the emphasis on lost jobs. The security of our personal data and the risk of identity theft is seldom mentioned (See: Kiss your financial secrets goodbye—major US banks outsource call centers to the Philippines, 5/29/2012).

The one organization that has emphasized the risk of identity theft has been the Communications Workers of America. In a paper posted on their website, they describe the size of the industry and its value to the US economy, as well as the risks of outsourcing the jobs and information. A snip:

Call centers are a major economic force in the United States – about 4 million people are employed by the industry, or 3 percent of the U.S.  workforce.

Among the key findings in the report include continued instances of fraud directly related to employees at overseas call centers; a lack of accountability and insufficient safeguards to protect consumer information from overseas security breaches; and the recent trend of sub-outsourcing in which foreign call centers located in places like India have outsourced to even cheaper labor markets, including countries such as Saudi Arabia and Egypt.

So where will my T-Mobile data end up? The Philippines? India? Saudi Arabia? If a government spy agency wants to look at my call record, it’s obviously easier if that record is somewhere overseas.

Every time a bank or other company outsources a call center, their customer’s data becomes available at an overseas location, out of the reach of US law and out of control of the US company itself. In fact, if the work is sub-outsourced, the data is out of the control of anyone. Just kiss your privacy goodbye.

Call center jobs in the States are often union jobs, ensuring that US workers receive fair pay and benefits. Overseas, with rock-bottom wages and unknown working conditions prevailing, the temptation of ID theft—that is, selling the data made available overseas by US companies, is apparently a great temptation:

In March, undercover reporters for England's Sunday Times met in India with "IT consultants" who claimed they were call center workers and offered to sell them credit card and medical information for 500,000 Britons—including account holders at major banks such as HSBC.

[Mother Jones, 3 Years After Taxpayer Bailout, Bank of America Ships Jobs Overseas, 5/29/2012]

There’s little that we can do to protect the data as long as the call centers are overseas—except to work at getting those sensitive jobs returned to this country and back under US jurisdiction. It also makes sense to have these positions held by American workers at this time of high unemployment. But the US House is not on our side. See: House GOP Votes Against Considering Call Center Bill, Aligns Itself Against U.S. Workers & Consumers (CWA, 6/19/2012).

Presidential candidate Mitt Romney’s role in sacrificing American workers to the gods of profit and greed has just hit the news. From this morning’s Democracy Now:

Bain Profited from Outsourcing Under Romney

Mitt Romney continues to face scrutiny over his time at the helm of the private equity firm Bain Capital. The Washington Post reports that under Romney’s leadership, Bain invested in a number of companies that specialized in outsourcing U.S. jobs overseas to lower-wage countries like China and India. Bain’s holdings spanned a number of firms that were known as pioneers in the practice of sending jobs to call centers and factories making computer parts abroad.

[Democracy Now, Headlines, 6/22/2012]

From the referenced Washington Post story:

Mitt Romney’s financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.

But a Washington Post examination of securities filings shows the extent of Bain’s investment in firms that specialized in helping other companies move or expand operations overseas. While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment.

[Washington Post, Romney’s Bain Capital invested in companies that moved jobs overseas, 6/21/2012]

It makes no sense to create risk, put people out of work, and damage the US economy—except to the uncaring corporations who control our political system. We need to find ways to counter this trend, which certainly includes fighting the Citizens United decision and reducing the influence of corporate money on politics.

We should also recognize the protective role of unions—which is why corporate-sponsored government at every level is on a binge to destroy union jobs. If they succeed, perhaps these jobs will return to the USA eventually—when wages here dip lower than in India.


i guess i'm more cosmopolitan larry. i don't see workers of third world as the problem but the system that would allow for india or other places to have such a comparative advantage to the US and still keep third world workers in relative poverty. how do we address the bigger economic issue of economic justice for all people, american or not?

Larry you are exactly right. I don't want my credit card information handled by a clerk earning $2 an hour who requires $8 an hour to survive. Guess how that clerk is going to make ends meet.

Economic justice for worker's in foreign countries is not the issue here. On that subject though a huge part of the problem are our free trade policies with allow large companies to exploit foreign workers. Our free trade agreement with Mexico allowed American Ag companies to drive Mexican farmers out of business by growing food cheaper than the locals could. Out of work farmers then made their way to the cities looking for work at American built factories. Those American factories then moved to the Far East looking for even cheaper labor leaving a huge unemployment problem in Mexico. The world's economic problems stem largely from us.

Post a Comment

Requiring those Captcha codes at least temporarily, in the hopes that it quells the flood of comment spam I've been receiving.

<< Home


page is powered by Blogger. Isn't yours?

Newer›  ‹Older