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.
With economic inequality soaring to heights not seen in the United States since the progressive era of the early 20th century, it makes sense that some issues on the policy agenda from that bygone age are re-emerging today. Among them: antitrust.
In recent years, the rise of corporate concentration, its negative effects on the broader economy, and the atrophy of antitrust enforcement have become the subject of increasing progressive concern. While some liberals argue that lax enforcement is the problem, a growing number contend that the statutes themselves, or at least the standards by which the consequences of concentration should be measured, need to be expanded.
On October 5, the Democrats on the House Judiciary Committee and members of the House Progressive Caucus jointly hosted a discussion of how best to revive a serious antitrust program, in which panelists offered divergent views of both the diagnosis and the cure. Diana Moss, president of the American Antitrust Institute, argued that the problem was the weak enforcement of existing law. She noted that the Federal Trade Commission has brought claims that a company has violated Section 2 of the Sherman Act—the blockbuster 1890 law that made it illegal for any person to monopolize or attempt to monopolize part of the economy—fewer than ten times in the last 20 years, but that on paper, at least, existing antitrust law like the Sherman Act and the consumer-welfare standard for merger review are sufficient to address the problem of contemporary market consolidation, if regulators are given the incentives to enforce them.
Taking a different tack, Marshall Steinbaum, the director of research at the Roosevelt Institute, contended that the consumer-welfare standard, which sees costs to consumers as the primary measure of anti-competitive behavior, has been outmoded by contemporary practices. He illustrated this with the example of Amazon’s acquisition of Whole Foods: Amazon promised to cut consumer prices in the weeks before the deal, and in turn the FTC spent less than a month reviewing the merger for antitrust concerns. Just weeks after the acquisition, however, Amazon centralized decision-making about how local suppliers would be allowed to advertise their goods in-store, a decision that may make it difficult for small suppliers to gain a foothold in stores.
Two other panelists, Marcellus Andrews, an economist at Bucknell University, and Lina Khan, director of legal policy at Open Markets (the recently formed antitrust group that broke away from New America), both made clear the breadth of issues affected by antitrust laws. “It is difficult to overstate the effects of market concentration,” said Khan, noting that concentrated supply chains in Puerto Rico meant that damage caused by Hurricanes Maria and Irma had caused a nationwide drug shortage. Andrews played out some of the implications of antitrust for racial justice, noting that the “monopoly premium,” the additional cost of a good above the market price added on to it by a monopolizer, multiplied the impact of credit discrimination against minority communities.
Antitrust has gained more prominence since this summer, when Democrats made it a centerpiece of their “Better Deal” agenda. But coming up with specific policies to deal with the most pressing issues raised by economic concentration is no small challenge. Representative Keith Ellison, who took on role of host at the forum, also took time to plug his bill, the Independent Retrospective Merger Act, which would task the Department of Justice’s Antitrust Division and the FTC with evaluating whether a merger hurt consumers or promoted anti-competitive behavior. Ellison’s bill could help regulators respond to acquisitions like the one Amazon made, where arguably anti-competitive practices began only weeks after a merger.
Forums like these are signs that antitrust, the vogue of early 20th-century America, is back on the rise.
Encouraged by Donald Trump’s poor approval ratings and an unproductive Congress, Democrats believe that they can make up some ground in the 2018 midterms. But if the party wants to make waves, they will need to get Latinos, one of their key voting blocs, to the polls. Nearly 70 percent of Latinos voted for Clinton in 2016, but Latino electoral power has been hamstrung by low voter turnout. In the 2014 midterms, only 27 percent of eligible Latino voters went to the polls, a record low.
Voting rights activists are working to shake up that dynamic. During Hispanic Heritage Month (September 15 to October 15), three of the largest Latino civic engagement organizations, Voto Latino, iAmerica, and Mi Familia Vota launched the “Register, Ignite, Strive, and Engage” (RISE) voter registration campaign. The campaign aims to shift the heritage month’s focus from cultural celebrations to political organizing.
Jessica Reeves, the chief operating officer of Voto Latino, points out that Latinos would suffer disproportionately under Republican proposals like repealing the Affordable Care Act. Prior to the passage of the ACA, 40 percent of working age Latinos were uninsured; by 2016, only 24 percent lacked insurance, a number that would certainly spike if the ACA went by the wayside.
Latinos have been one of President Trump have been favorite targets. His signature campaign promises included building a border wall and portraying Mexicans as criminals. ICE arrests of undocumented people, which have had a particularly devastating effect on Latino communities, have increased under Trump. The president has also promised to end the Deferred Action for Childhood Arrivals (DACA) program next year unless Congress passes a new version of the bill. Nearly 80 percent of DACA “total potentially eligible” youth are from Mexico or Central America, according to the Migration Policy Institute, a Washington-based think tank.
RISE aims to use these issues as political organizing tools in Latino communities. The campaign has partnered with more than 200 local and national organizations, such as Planned Parenthood and the Environment Defense Fund, to help them engage with Latino voters on specific topics. The group is especially keen to get out the youth vote. Nearly one million Latinos turn 18 every year, but only 15.2 percent of millennial Latinos voted in the 2014 midterms. (Reeves notes that young Latinos are more likely to be key decision-makers in their households at earlier ages than their white peers, but are less likely than older Latinos to vote.) RISE has also been reaching out to LGBTQ people, Afro-Latinos, and indigenous communities that tend to be overlooked.
Many House and Senate races will be a tough slog. If Democrats hope to topple Republicans like Jeff Flake of Arizona and Dean Heller of Nevada, turning out Latinos voters who make up a large share of the electorate in those two states is critical.
Getting Latinos to the polls to big numbers in 2018 is one way to check Trump’s bigotry. “Latinos have been in the crosshairs of the Trump administration,” says Reeves and the RISE coalition intends to help “the community to come together.”