September 10, 2007

(Dis) Connect North America

(Dis) Connect North America
Abrupt call centre closing throws 375 people out of work.
Chris Arsenault
Published Thursday September 13th, 2007

Everything was business as usual at Connect North America on August 29; employees made phone calls and managers pushed them to up-sell. On August 30th, staffers grabbed coffee and headed for their 10 a.m. shift. They were greeted by a simple sign: "Closed until further notice." And with that, 375 people in Fredericton and Bathurst were out of work.

This is the era of globalization and those life-changing signs can appear almost anytime. Employees are expendable. And while Connect North America has disconnected hundreds of New Brunswickers from their grocery money, the company may well re-open under a different name - perhaps this time in the Philippines or India.

The call centre knows no bounds. Time, it's a social construct and a minor business hassle. Workers in India often start their shifts in the middle of the night, answering customer service calls from people half a world, and several time zones, away. Space, it doesn't matter. The work can be conducted from pretty well anywhere, as long as wages are low and people are desperate.

Between 2001 and 2004, the United States lost 250,000 call center jobs to India and the Philippines, according to Technology Marketing Corp., a Norwalk, Conn.-based company specializing in call centers and telemarketing. The stats for Canada are likely similar.

"Call-centre jobs are among the most migratory types of jobs," said Charles Cirtwill of the Atlantic Institute for Market Studies, a right-wing think-tank based in Halifax. "They go where the lowest-cost supplier is."

The call centre phenomenon arguably first appeared in 1972, when Continental Airlines approached the Rockwell Collins division of Rockwell International to develop the first automated call distributor so that the basic need to answer customers' questions could be met.

Today, Industry and Training Minister Ed Doherty says "the call centre industry is very healthy in New Brunswick." This may be true. But the call centre boom spawned by Frank McKenna can only last so long- especially when the Canadian dollar is virtually on par with the U.S. green-back. Companies want cheap labor and will search the world to find it. And on that front, New Brunswick simply can't compete. This isn't some conspiracy, just business.

When flamboyant Frank was enticing companies to set up shop in NB, his government advertised in business trade publications and in The Globe and Mail and 'cheap labor' was a major selling point, along with generous subsidies and tax write-offs. When McKenna stepped down in 1997, he had created 9,000 new call centre jobs, according to UNB economics professor David Murrell.

But these jobs didn't come for free. In fact, they were quite expensive. The Atlantic Canada Opportunities Agency handed Connect North America $300,000 between 1992 and 1995. The New Brunswick Government gave the company $170,000 between 2002 and 2005 in the form of wage reimbursement under the provinces Workforce Expansion Program. This is our money and don't count on Connect North America paying it back.

In other economic sectors, workers organized unions to protect themselves from the insidious brand of banditry practiced by companies like Connect North America. And while unions have penetrated some call centres, outsourced operations which aren't directly affiliated to the companies they serve, are almost impossible to organize.

The phone room can simply move to another location if workers sign union cards.

Call centre agents working in unionized phone rooms are on average paid 36% more than their non-union counterparts, according to Dr. Ann Frost, a professor at the Richard Ivy School of Business. And if there is one thing call centres want to avoid it's high wages. Or, in the case of Connect North America, paying any wages at all.

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