Peripheral Call Centers - the New Economy's Sweatshops

Sophie Shulman
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The phrase, "call center," has a high-tech sound to it. In Israel, however, as in the rest of the world, many would say that the combination bears great similarity to another, much older term - sweatshop.

Customer service centers are the New Economy version of the familiar sweatshop, claim articles appearing in respected newspapers such as the Wall Street Journal, as well as more biased journals published by Communist movements or opponents to globalization. Telephone customer-service centers began to proliferate in the 1990's.

The biggest difference, some charge, between them and the traditional sweatshops is that the modern ones are air-conditioned and computer-equipped.

One point of similarity cited by human rights activists is the relocation of many call centers in recent years from Western countries to developing states, with the aim of exploiting the cheap labor there. They claim that this relocation perpetuates the gap between the "developed North" and the "backward South."

Israel's Industry and Trade Ministry recently adopted a decision to encourage the relocation of telephone call centers from the center to outlying areas - southern Israel and confrontation-line settlements up in the North - with the intention of fighting unemployment in the periphery. The government will provide financial assistance and tax benefits to businesses opening call centers in high-priority regions.

Sounds good? Not for everyone. There are those in Israel who would argue that despite their modern look and feel, the service centers do not deliver on their promises.

"They're politicizing the whole issue," counters Ilan Cohen, managing director of the POC consulting group, which advises commercial firms and government organizations on setting up call centers. "Lot of people feel that only industry should be supported and cannot understand why the state should support service centers," he says. "The best proof I can offer is that call centers are far from being sweatshops, in that 80 percent of the employees are students... You don't often see students working on an assembly line, be it in a factory or in a slaughterhouse."

The first customer-service centers began operating in Israel in 1991, and according to the Labor and Social Affairs Ministry, there are now dozens of such centers in Israel, employing a total of 6,250 workers. For the sake of comparison, there are 75,000 call centers in the United States, employing 1.5 percent of the American work force.

Israeli call centers have an annual turnover of NIS 230 million, and the hourly wage paid to employees is NIS 18-30 an hour. Shifts are usually nine hours. The leading companies in the sector include TelAll, TeleClal and Beeper.

India and the Philippines have become popular host countries for call centers, due to the cheap labor force and the fact that English is spoken in both countries.

AOL, Citibank, Fujitsu and Microsoft are among the multinationals that have relocated there. Someone calling Microsoft's customer-support hotline is likely to speak with an Indian operator who has never been to the United States.

"The cost of setting up the call center infrastructure is minimal, amounting to around $1,000 per workstation," says POC's Cohen. "All you need is a computer and software, a telephone switchboard and a 4 square meter desk for each operator," he explains. Architects typically calculate that white-collar employees require 13 square meters per workstation. "And the low cost of communication makes it possible to relocate service centers to peripheral areas, far from the company and its clients," Cohen says.

One advantage of the call centers is that they provide employment to population sectors that often have a hard time finding regular work, including mothers of young children, older people and the disabled. "Older people and the disabled are often not very mobile and, therefore, cannot be salespeople. But they can be good at providing services and marketing by telephone, meaning that call centers can respond to their needs," explains Cohen. "Good workers that work at marketing centers such as those operated by the tourism company Daka 90 or the AIG insurance company can earn double the minimum wage," he claims.

Cohen sees only one liability. "I concur with the claim that call centers do not create new jobs, that they only replace other people," he says. "Nevertheless, the people being replaced are mostly students who won't have a hard time finding other work, as opposed to people living in outlying areas, for whom this may be one of the only job opportunities."

A., who has worked at call centers, does not share Cohen's optimistic assessment. She describes a rigid work regime that was the norm at a cable TV call center at which she worked for 18 months. "The employees have to be extremely punctual; and at the start of each shift, they are given a report on their previous shift, with a breakdown of the number of calls handled and the response times. Anyone who handled less than 12 conversations per hour, and whose response times to incoming calls were too long, is reprimanded. If this pattern is repeated, they will be fired," says A.

However, these conditions would be considered standard at most workplaces. Things get more problematic when it comes to the worker's privacy. The nine-hour shift includes a 30-minute break and a 15-minute break, both of which must be scheduled in advance.

Employees may not conduct private conversations during their shifts, even by cellular telephone; hence, for many mothers who want to maintain contact with their children, working at a call center would be unsuitable.

Some of the service centers have systems that record conversations, and the shift manager often listens in on conversations between operators and customers, as a means of gauging the quality of service and weeding out employees who are not polite enough. The shift manager also reviews the reports on service calls, and analyzes them together with the operator. Impolite or impatient responses are recorded in the personnel file.

However, Cohen dismisses what he calls "childhood diseases" and believes that the system will work out the kinks and find a good balance between the requirement to maintain discipline and give good service, and reasonable conditions for employees.

Cohen forecasts a glorious future for call centers, and believes that Israel will also play a role in this global revolution. He says the number of persons employed in Israeli service centers will eventually reach 60,000, with most coming from outlying regions.