The recent anti-outsourcing bill proposed by Senator Charles Schumer is a source of concern for the Filipino American community.Â The Shcumer bill, places a tax on outsourcing and Filipinos in the U.S. it is going to hurt businesses in the Philippines and give the U.S. a bad image. Recently, members of the community traveled to the capital to visit Senators Kristen Gillibrand and Charles Schumer to express their opposition to the bill.
In essence, the bill puts a 25-cent tax on each call made to a call center based outside the U.S. By placing a tax on call centers positioned overseas by U.S. firms, the bill is taking away the incentive to offshore customer care calls.
In effect, the companies that would be most affected would be those outsourcing to Philippines and India. Call centers require a fairly high level of expertise in English and the Philippines boasts a population of residents who speak near native English.Â In addition to the fine, the caller will be informed about the transfer of call and the country to which it is transferred.
National Federation of Filipino American Associations (NaFFAA) member, Loida Lewis told Asian Journal, that Sen. Gillibrand has agreed to speak to Sen. Schumer and convince him about incentivizing MNCs that develop help desks within the U.S.
A letter from NaFFAA to Sen. Schumer said that the proposal is incongruous with the impression of America as a big brother. This is particular true of the Philippines because the country is gaining momentum in the outsourcing industry. It should also be noted that Philippines and other under developing nations are trying to regroup after a massive economic recession that roiled global economies. The NaFFAA members also commented that the tax on call centers would cancel the purpose of having call centers abroad.
Philippine Trade Commissioner Josephine Romero was quoted as saying that the reality is that American citizens are fighting the highest unemployment rate in California, where she resides.
However, she added that decision making regarding outsourcing should be left to companies running their day-to-day operations because they are accountable to shareholders. These companies, she said have a duty to examine the effect of a tariff on customer service and its impact on the delivery of customer care with quality in order to run the business.
Moreover, outsourcing companies based in the U.S. like Hit Rate Solutions have opposed the Schumer bill saying it as an act of protectionism. The operations director of Hit Rate, Adam Shore, said in a comment that the bill shows no clear understanding of outsourcing or business operations. Should the bill be passed, it would hurt global firms in the U.S. and the rest of the world, said Shore.
Shore continued to say that Schumer is not aware of the sheer number of calls serviced at a contact center. There is misconception that small companies are not involved in outsourcing. And that major corporations with big budgets gain the most from offshoring. This is not the reality, said Shore.
The proposal has passed in the House. It is now in the Senate for scrutiny and its primary purpose is to create a disincentive for outsourcing.
However, proponents of outsourcing say that the only substitute to offshoring in the present economy, where cost cutting is the name of the game, is to put a complete freeze on hiring.
In aggregate, it is possible that the bill created to offset more outsourcing could backfire and result in more unemployment as a means of cost reduction by companies trying to survive under a harsh economic climate.