IT Outsourcing is getting out of hand.

POSTED BY: Haken
UPDATED: Tuesday, March 30, 2004 15:47
VIEWED: 1998
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HAKEN

Sunday, March 28, 2004 7:58 PM

Being in IT, I'm really getting sick and tired of our jobs going overseas. Recent victims, employees of Travelocity

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A Town's Future Is Leaving the Country
By David Streitfeld Times Staff Writer

CLINTWOOD, Va. — This remote Appalachian town doesn't get many visitors, but every day it sends thousands of travelers on their way. If you buy an airline ticket off the Travelocity website and need to call with a change or a question, the phone rings here.

The Travelocity call center brought 250 jobs to a community wounded by the decline of coal mining, its mainstay for a century. It plugged the town's 1,500 residents into the global high-tech economy, offering the prospect of a secure future.

That illusion crumbled last month when Travelocity fired Clintwood, saying it would close the call center by year-end and move all the jobs to India. The Internet, far from being the town's salvation, is threatening it with collapse.


Opened fewer than three years ago, the center is the largest private employer in the county.


"I figured it would be here forever, like Wal-Mart," said Greg Owens, 29, who joined Travelocity after being laid off from a job at a private school in northern Virginia. "Most of us are just praying for something else to come in."


The closing of the call center in Clintwood and two others in nearby towns demonstrates American companies' increasing efforts to outsource jobs to India, the Philippines, Russia, Malaysia and other far-flung places.


As high-speed data cables wire the world, locales with cheap labor can gain jobs — and those with expensive labor can lose them. The call center clerks in Clintwood start at $8 an hour. In India, their replacements will earn less than a quarter of that.


These towns' struggles also show some of the difficulties that many communities will encounter if, as experts predict, outsourcing continues to grow. More than a quarter of the 2.25 million call-center jobs in the U.S. are expected to go offshore.


The towns are painfully learning that they need to develop jobs, companies and resources that can't be easily relocated. But that isn't a simple mission for low-wage, low-skilled workforces like those in Appalachia. Like much of rural America, the area has seen a brain drain for decades.


Some critics see no hope. "Unless we can reverse some of these trade inequalities, the working class will simply be ruined. They'll flip burgers, go on welfare or sell drugs," said Lewis Loflin, an adjunct professor at Virginia Highlands Community College in nearby Abingdon who runs a website criticizing the region's failed efforts at economic development.


Corporations have been moving U.S. factories to other countries for decades, but the trend has only recently caught on with office workers like those in Clintwood. Many economists contend that so-called offshoring is healthy, that dollars paid to workers in other countries ultimately return to America to be spent on goods and services.


By reducing costs, outsourcing also allows companies to lower prices, which benefits consumers. In theory, at least, companies will take their savings on labor and use the money to expand, which should ultimately include more hiring in the U.S.


All this is cold comfort for tens of millions of office workers, many of whom feel vulnerable. In this election year, offshoring has blossomed into a potent issue.


Until recently, Appalachian towns such as Clintwood were an outsourcing destination, not a victim. Companies that wanted to cut costs could hardly find a cheaper place in America. With that salary of $8 an hour plus benefits — something almost unknown in these parts for entry-level jobs — Travelocity had no trouble attracting employees.


Amanda Rose, a 19-year-old college student, left a clothing store for Travelocity. But before she could start, the Internet company announced the shutdown. Her old job already had been filled. "I had a pretty good job, then here comes this great job, and two days later I have nothing," Ro

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