When Capital One announced in August that they were laying off 400 call-center workers from a Rolling Meadows, Illinois, location, the company officials claimed that they were moving toward automation. “Call volumes continue to decrease as customers increasingly self-service through a mix of our digital tools and contact center calls,” Sie Soheili, a Capital One spokesperson, told the Chicago Tribune. The Rolling Meadows layoffs follow the loss of 1,500 Capital One call-center jobs in Oregon and South Dakota in 2015. Yet last year, Capital One opened a new customer-service and technical-support office in the Philippines, creating 2,000 call-center jobs. Today, Capital One employs 4,800 call-center workers in a country that had no call centers at all just four years ago.
With 2.5 million people employed at call centers in the United States, employees in the sector face an existential crisis as companies close down one center after the other. While the corporate officials may say they are bowing to pressures from consumers, many of these companies decide to lay off American workers and hire less-expensive foreign workers in countries like the Philippines.
Wells Fargo, who earlier this week laid off hundreds of employees at a call center in Allentown, Pennsylvania, also has shifted jobs to the Philippines. The company has laid off hundreds of American call-center employees over the last decade, even as the company expands their call-center hiring in the Philippines (which assists U.S. customers).
Tim Sloan, the CEO of Wells Fargo, effectively admitted to offshoring jobs during a Senate Banking Committee hearing in early October. Senator Joe Donnelly, an Indiana Democrat, asked Sloan whether Wells Fargo “let people go in the states and then added people in the Philippines?” Sloan responded, “Senator, we did,” before attempting to brush off the offshoring issue by claiming the call centers in the Philippines allowed Wells Fargo to provide 24/7 customer service. A smirking Donnelly replied that he knew many Americans who would be willing to work night shifts.
Call centers are at the front of a company, providing general customer service or technical support. They also serve as telemarketing hubs. Most sectors with large numbers of customers who require those services, from telecommunications and media to banking and financial services, use call centers. But the nature of the work means that it can be done from anywhere in the world, and companies pay Filipino and Indian employees much less than comparable American workers.
Offshoring call centers isn’t just a threat to workers. This trend also presents a problem for American consumers. Poorly paid center employees in the Philippines and India have few opportunities for advancement. In that climate, it is easy to see why cybersecurity analysts say there is a risk of call-center workers committing identity theft. Despite this, almost all of the major banks in the United States, from Bank of America and Chase, to Capital One and Wells Fargo, operate call centers overseas.
Organized labor has been fighting corporate offshoring of call-center jobs for years. But with labor unions’ power waning and corporations eager to reduce labor costs any way possible, that skirmish proved to be a tough one. Even so, the Communications Workers of America, which represents most unionized call-center workers, has had some success. In 2016, striking Verizon workers represented by the CWA stayed on the picket line until Verizon made wage concessions and promised that 1,300 new call-center jobs would be created in the United States. Shane Larson, a CWA spokesman, described the Verizon strike as a “huge win.”
“We kept good jobs in the U.S. and brought back previously offshored jobs,” he said. US Airways, also under pressure from CWA, closed the last of their Filipino call centers in 2011, a process that began in 2004 after a labor dispute.
Prodded by union activism, seven Senate Democrats, led by Senators Sherrod Brown of Ohio and Robert Casey of Pennsylvania, introduced the U.S. Call Center Worker and Consumer Protection Act earlier this year, which would require overseas call-center employees to inform American callers and give those callers an option to speak with a U.S. call center if they’d prefer. It would make corporations that offshore call-center jobs ineligible for some federal grants and loans. Representatives Gene Greene, a Democrat from Texas, and David McKinley, a Republican from West Virginia, introduced a similar bill in the House. He said in a press release, “our number one priority in Congress is protecting and creating American jobs. Plain and simple, we should not be rewarding companies for moving jobs offshore.”
Similar bills have been introduced in eight state legislatures, including Georgia and Alabama, where Republicans introduced the bills that echo President Trump’s “America First” message: In the Peach State, the bill is called “The Georgia Jobs First Act of 2017.”
Offshoring call centers is an easy way for corporations to cut labor costs. But with wage stagnation and growing income inequality, state and federal lawmakers need to decide whether corporations should be allowed to lay off American employees and then hire workers abroad for less money while enjoying lucrative government contracts and tax subsidies.