Call Centers and the Global Division of Labor

A Political Economy of Post-Industrial Employment and Union Organizing

Andrew J.R. Stevens

• Publisher: Routledge
• Year: 2014
• Topic: Business
• eBook ISBN:
  9781135118679
• Subtopic: Operations
• Index: Business

Call centers have come, in the last three decades, to define the interaction between corporations, governments, and other institutions and their respective customers, citizens, and members. The offshoring and outsourcing of call center employment, part of the larger information technology and information-technology-enabled services sectors, continues to be a growing practice amongst governments and corporations in their attempts at controlling costs and providing new services. While incredible advances in technology have permitted the use of distant and "offshore" labor forces, the grander reshaping of an international political economy of communications has allowed for the acceleration of these processes. New and established labor unions have responded to these changes in the global regimes of work by seeking to organize call center workers. These efforts have been assisted by a range of forces, not least of which is the condition of work itself, but also attempts by global union federations to build a bridge between international unionism and local organizing campaigns in the Global South and Global North. Through an examination of trade union interventions in the call center industries located in Canada and India, this book contributes to research on post-industrial employment by using political economy as a juncture between development studies, the sociology of work, and labor studies.

1 Introduction

This is a book about the political economy of call center work and trade unionism. Research began in 2006 as recognition of India's role as the world's digital back office was gaining momentum in Canada and the United States. By the time field research commenced in 2007, interviews with industry representatives, call center workers, and trade unionists were full of apprehension about the looming economic crisis. Near the end of 2008, there was fear in India among the benefactors of information technology (IT) globalization that Barack Obama's imminent presidential victory might signal tough times for high-tech industries dependent on offshoring business from the United States. In Canada, call centers that provided services for American companies and consumers were beginning to see the effects of the country's rising currency exchange rate as labor costs were losing their competitive edge. And, because of the pace at which information technology enabled employment globalizes, the Philippines surpassed India as the leading offshore destination for call center work around 2010 as this study began to come to a close (Macaraig 2010). Much has transpired over the past ten years.

The first decade of the new millennium held promise and apprehension for those workers and industries affected by the globalization of information technology. Excitement over India's high-tech prowess reached new levels as the Indian Space Research Organization (ISRO) successfully launched an orbital lunar satellite in 2008. Coincidentally, ISRO veteran Kiran Karnik headed the National Association of Software and Services Companies (Nasscom), India's premier information technology and business process outsourcing (BPO) industry organization, between 2001 and 2008. Around the same time, Canada was experiencing record low unemployment rates and oil and resource companies, the jewels of Western Canada's economy, were reveling in record commodity prices. Most importantly, the country's currency had rebounded from its 1990s status as a “northern peso”. These were exciting times for two of the world's leading destinations for call center work.

Despite their obvious differences, both Canada and India rank as leading destinations for call centers and investment in services. To capture the economic and social conditions that characterize work and the global division of labor, political economy, or more precisely the political economy of knowledge work, is used in this study as the platform for analysis. What I argue is that call centers have become one of the most instrumental workplaces and industries in post-industrial capitalism because they function as a principal mechanism through which businesses and governments interact with customers, clients, and citizens, at least for now. Most of us know these ubiquitous and faceless workers by a number of designations: “customer service agents” and “customer service representatives”, “callers”, “telemarketers”, and “emergency services operators”. But how did the call center become so central in our interactions with complex organizations? Why are “off-shoring” and “outsourcing” so synonymous with a workplace that has as its origins the humble telephone operator, dispatcher, and reservation desk? Is it accurate to describe call centers as industries or sectors in their own right?

Thomas Friedman (2005) popularized the idea of a global call center industry with his now-infamous “flat world” treatise. For Friedman, the international promulgation of call centers was made possible by open economies and revolutions in technology. Of course, his account is also known for its subservience to a deterministic vision of information technology and the extent to which his writing appeases a corporate vision of globalization. For these reasons Friedman has been described by critics as the “court philosopher” for financial capital-driven globalization (see Chakravartty 2008). Such accounts of the call center's development, however, are closer to the end of the story than the beginning.

What my book asks is how political economic conditions precipitated the rise of call centers as a particular development in the history of telecommunications and knowledge work. The study departs from the idealistic depictions of call centers as Utopian post-industrial workplaces, but simultaneously problematizes uniform characteristics of employment in IT enabled services. Third, the book situates labor and unionism as the cornerstone of investigation. The foremost question here is: what are the challenges facing trade unions in Canada and India in their attempts at unionizing call centers? Canada and India have been selected as comparative studies because of their prominence as leading destinations for call center services. Cases and participants have been drawn from a handful of organizations that reflect the types of trade unions and professional associations that have come to represent workers in the information technology (IT) and IT enabled services (ITES) sectors, which include call centers. Specifically, the United Steelworkers (USW) in Canada, the Union for ITES Professionals (UNITES), the IT Professionals Forum (ITPF), and the Young Professionals Collective (YPC) in India, Unite the Union (Unite) in the UK, and the Swiss-based Union Network International (UNI), are used to construct a narrative of global trade unionism.

What the book maintains is that post-industrialism has not resolved the contradictions or crises within capitalism, nor have such developments deflected the deterioration of working conditions in seemingly prestigious industries. Such a perspective on theories of post-industrialism and knowledge work also suggests that the globalization of call centers vis-à-vis offshore outsourcing is not as seamless as populists like Thomas Friedman suggest. Attempts by multinational corporations to establish call centers in Mumbai, Bangalore, and the National Capital Region of India, for example, are met with a host of economic, social, and even cultural barriers. In the past four years, a growing number of British, American, and Canadian firms have even recalled their call center labor forces back to “home shores”. Major players like BCE Inc., American Express Canada, Sears, and others have brought thousands of call center jobs back to Canada from facilities in India and the Philippines. There is even talk in the United States of an “insourcing” boom as American corporations bring production, mainly in manufacturing, back to domestic shores because of a sinking standard of living and stagnant wage rates among the American working class (Fishman 2012; The Economist 2013; Bounds 2013; Silcoff 2012). Some of this return is, however, only symbolic and does not signal an end to the offshore experiment.

For labor, often a neglected subcategory when compared to marvelous technologies that seemingly define this post-industrial era, the question of organizing and unionism, as a means not only of resistance to employer power but also a mechanism of channeling collective action into institutions of regulation, remains important. Workers are as much a part of this political economic conjuncture as the businesses that employ them and the technology that controls them. And the term “worker” is used here deliberately. As the case of attempts in India to organize IT and ITES workers suggests, labor organizations have been forced to contend with how the making of identities, in E.P. Thompson's (1963) sense of the process, has meant a departure from “worker” to that of “professional”. This is not an act of false consciousness, itself a vulgar generalization of how collectivities and individuals are capable of understanding their social world, but a feature of how the call center industry selects to present itself and its employees. In fact, identity and professional monikers are part of the global division of call center work.

POST-INDUSTRIALISM AND THE CALL CENTER IMAGINATION

The business imagination has been particularly enamored with the promise of India, as the internationalization of capital and investment have moved substantially toward services after decades of being centered on manufacturing and primary commodity sectors. Indeed, the common conception of the offshoring and outsourcing of work is one determined by the idea of distant shores and foreign labor—as well as the decline of “domestic” opportunities and greater promises abroad—as the manifestation of globalization. Call centers are quintessential in this regard. In 2006, Time magazine featured on its cover an image of a female employee, presumably of Indian decent, dressed in a traditional dancer's outfit donning a telephone headset. The 2006 release of Outsourced, a film depicting the story of an American call center manager sent to India to train staff in the company's new offshore facility, further popularized a particular image, albeit comical, of Indian call center life. Four years later NBC aired a sitcom based on the movie of the same name. In India call centers have similarly entered the popular imagination through novels like Chetan Bhaghat's (2005) One Night @ the Call Center, itself released as a feature length film in 2008.¹ Thomas Friedman (2005) had written earlier of the Indian back office and customer service agent as prototypes for his vision of the new global economy, staffed by eager and highly skilled workers who were helping to make the world a flatter and less expensive place in which to conduct business. For those who seek to embrace the riches that service off shoring has to offer, and on the other side of the debate those who lobby for restrictions on the use of foreign workers, India has become a convenient poster child for such causes.

Behind the imagery of India as the back office and call center hub for the world's businesses and, increasingly, governments, is a complex and more “nearshore” reality of call centers. For years, Canada grew in prominence as a world leader in the offshore and outsourced call center business, along with other wealthy economies that make up the OECD (Organization for Economic Cooperation and Development), like Ireland and the UK. As I show, the financial crisis that began in 2007–2008 upset the existing patterns of outsourcing and offshoring by moving more investment and jobs toward emerging economies, like India. Still, the flow of trade and investment are strongest between the most privileged and advanced capitalist countries (UNCTAD 2004, 2006). Only since 2009 have developing and transitional economies, another term used for developing countries that are experiencing massive economic growth, begun to receive a near-equal share of foreign direct investment (FDI), although this growth in prosperity has been made more uncertain by the ongoing global economic crisis (UNCTAD 2012).

In 2009, almost 75 percent of FDI outflows originated in the developed economies, down from nearly 85 percent in 2008, prior to the financial crisis (UNCTAD 2010). This is especially true for the higher valued business and IT services trade. A shift has occurred in recent years from these higher cost destinations to places like India and the Philippines, but the economic terrain of offshoring and outsourcing is hardly one where the so-called peripheral economies have been the only recipients of value-added services and employment. Earlier accounts point to the United States as home to more call centers than any other country, employing over four million workers in excess of 60,000 facilities (Head 2003; Holman, Batt, and Holtgrewe 2007). As in India, the expansion of the call center industry in Canada has been conditioned by technological innovations in telecommunications that have developed in tandem with changing regimes of regulation. The reproduction of inequalities and issues of underdevelopment in advanced and emerging economies also accompany such transformations. It is no coincidence that Canada's Atlantic provinces, notably Nova Scotia and New Brunswick, were at the forefront of recruiting call centers as an answer to the region's economic stagnation throughout the 1990s. A similar claim can be made of India's emergence as a call center hub, despite the obvious differences between the two countries.²

Amidst the uncertainty in how the story of call center, information technology, and service occupation offshoring will unfold, it is important to consider the rate of economic development taking place in India and, to a greater extent, China. The Italian political economist, Giovanni Arrighi (2007, 1), noted in his final book that the changing contours of world systems can be described as an “economic renaissance of East Asia” because of the growing significance of the region in the world economy. An increasing flow of investment to the region from the developed economies is one feature of this transition. The conditions for this renaissance, Arrighi argued, have been building after a long and gradual revolt against the West's hegemony in the world economy, with signs of social and economic empowerment starting to bear fruit throughout Asia. Arrighi positioned an interpretation of Adam Smith's Wealth of Nations as a foundation for his analysis of the shift in global power and economic relations from West to East. The release of his work was timely because it was published on the precipice of the 2007 financial collapse, which created conditions for nations like India to take further advantage of an integrated global economy.

Along with these cultural images attached to call center employment are the conditions of work in information technology enabled spaces. Our interaction with call centers, part of the broader ITES and business process operations (BPO), or business process management (BPM) as it is now called in the industry literature, is ubiquitous. At times these exchanges are banal, sometimes frustrating, and at other moments pressing and necessary, as might be the case with telehealth or emergency services. But how often do we, as users of call center services, consider the conditions of employment, the access to wages and benefits these workers possess? What about the recognition of these workers as unionized employees? Equally significant is the fact that much of our interaction with major institutions is now mediated through a telecommunications network that is in many ways as old as commercial telephony itself, despite our thinking of call centers as a relatively new phenomenon. There is much activism and literature on offshore garment and textile sweatshops, but the condition of service work is often overlooked. How often does it cross our minds that prison labor in India, China, and even the United States is used to staff outsourced call centers? Would consumers tolerate this of a garment manufacturer? Similarly, there is acceptance in the consumers' eye that textiles and manufactured goods need to be produced in low-wage economies for these products to be affordable, but there is offense to interacting with foreign workers for customer service.

What the global division of call center work signifies is not just a process of globalization, but an evolution in corporate capitalism. Businesses are agents in creating economic conditions that demand a shift in accumulation, the use of foreign labor markets, and how organizations interact with customers. As the size and complexity of corporations expanded, so too did the need for more sophisticated models of organizing production and human resources. Even before the introduction of advanced communication and information technology in the workplace, the growing scale of markets demanded a scientific and professionalized class of managers to oversee national and international operations (see Chandler 1977). Call centers developed to provide efficient and technological-enabled interactions with vast numbers of customers in increasingly large organizations. Banks and telecommunications companies pioneered the use of call centers as a dedicated instrument to interface with customers in the late 1970s, but it was not until the 1980s and early 1990s that call centers became the ubiquitous means by which utilities, healthcare providers, transportation and freight companies, social service agencies, travel and entertainment providers, and sales firms conducted their core and non-core activities through inbound, outbound, and “blended” customer-contact centers (Russell 2009).

Call centers are denned as dedicated operations in which employees receive inbound or make outbound telephone calls, with those calls controlled and processed by an automatic call distribution (ACD) or predictive dialing system. The operations, which constitute call center processes, permit customer-employee interaction to occur simultaneously with the use of display screen equipment and instant access to information. For leading scholars in the field of call center studies, like Phil Taylor and Peter Bain (1999), as well David Holman (2005), this technologically mediated interaction between agents and customers helps distinguish this type of work from other working environments. Furthermore, what differentiates call centers from contact centers is the former's reliance on voice-based interactions, whereas the latter depend on other technologically mediated processes, such as email, social media, or fax.

Since the late 1990s, call center employment has been the subject of debate among labor scholars, with much of the discussion stemming from the literature on computer-assisted employment a decade or more earlier. As the field of call center studies matured, a general consensus emerged that call center work could be described as repetitive, heavily scripted, and routinely surveilled. These conditions were accompanied with a long list of physical and mental strains that are characteristic of this type of employment (Zweig 2005). Employee selection criteria have subsequently been designed to recruit prospective workers who are mentally and physically capable of dealing with these strains (Callaghan and Thompson 2002). Such features make call center labor processes consistent with the elementary aspects of scientific management, as initially conceived by American engineer and stop-and-motion man, Frederick Winslow Taylor (2005/1911). This is why sensationalist monikers like “electronic sweatshops” and “Roman slave ships” have been used by labor organizers and scholars to describe the industry (see Garson 1988; Remesh 2004a, 2004b). Claims of “proletarianization”, “cybertariat”, and “cyber coolies” are similarly used to describe these new factory workers of the 21st century (see Norling 2001; Huws 2003; Remesh 2004a; 2004b). For many reasons there is justification for using pejorative language to classify work in the sector. The use of underemployed and marginalized populations is a practice routinely used by the industry as a means of keeping wages low. A globalized division of labor has enhanced the comparative advantage of lower wage regions like India.

For these reasons much of the literature on call center work is indebted to the work of Harry Braverman (1974) and his seminal book, Labor and Monopoly Capital, which launched the field of critical labor process theory. Braverman advanced the idea that the intrusion of scientific management into the labor process, originating in the work of F.W. Taylor, was a pivotal historic moment whereby labor was deprived of its control over the processes of work. Richard Edwards (1979) and Michael Burawoy (1979) furthered Braverman's political reading of work and management practices some years later. While these and other studies of the labor process are not without critics, the principal aim of labor process scholarship has been to establish a political economy of work that ties together technology, social relations, and regimes of control with the study of labor. It is a perspective that Michael Burawoy (1979, 1985) has labeled the politics of production.

While the focus on knowledge work is underdeveloped in the works of Braverman and the earlier Burawoy, they nevertheless set the stage for future treatments of post-industrial labor that effectively capture the nature of knowledge labor processes specifically. But there has also been a decidedly activist bent to much of the research in the area. Ellen Cassedy and Karen Nussbaum's (1983) 9 to 5 helped to account for the gendered nature of work as well as to dispel myths surrounding post-industrial employment. As a politically charged “how-to” guide for working women, 9 to 5 acknowledged trade unionism's importance to office workers as the ranks of largely female service employees grew. Their work eventually gained public fame when Hollywood star Jane Fonda produced a film of the same name in 1980 depicting the lives of women who had taken enough from their patronizing male boss and locked him away in his own mansion as revenge. Most im...

Table of contents

• Cover
• Half Title
• Routledge Advances in Sociology
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of figures
• Acknowledgments
• 1 Introduction
• 2 The Globalization of Knowledge Work
• 3 The Political Economy of Offshoring
• 4 The Global Division of Call Center Work
• 5 India: Labor Organizing Off shore
• 6 Centers of Steel
• 7 Global Division of Knowledge Labor, Global Unionism
• 8 Conclusion
• Notes
• References
• Index