May 30, 2010

Sloppy, Erroneous AP Reporting Supports Schumer’s Proposed Foreign Call Center Tax

schumer4The federal government saw its tax collections fall by almost 20% in fiscal 2009 compared to fiscal 2008. Through the first seven months of the current fiscal year, year-over-year collections were down by another 4.5%.

New York Senator Charles Schumer (pictured at right; obtained from wbng.com) is desperately searching for another way to fleece taxpayers (because cutting spending is of course out of the question), and has come up with a “brilliant” idea. An unbylined Associated Press story gives Schumer’s idea, a foreign call center tax, undeserved cover by going back to seven year-old information about industry job losses that doesn’t reflect current conditions..

Here are the first five paragraphs from the AP story, followed by a later paragraph containing the outdated information:

Schumer wants to slow exodus of US call centers

In an effort to slow the exodus of U.S. telephone work to overseas services, Sen. Charles Schumer is introducing legislation that would impose an excise tax on companies that transfer calls with American area codes to foreign call centers.

The measure would also require telling U.S. customers that the call is being transferred and to which country.

Companies use call centers to give customers technical product support, answer billing questions or provide other information. They often use several operators.

The fee would be 25 cents for calls transferred to foreign countries. There would be no fee for a domestic call center. Companies would have to report quarterly their total customer service calls received and the number relayed overseas.

“If we want to put a stop to the outsourcing of American jobs, then we need to provide incentives for American companies to keep American jobs here,” Schumer said last week. The New York Democrat said the excise tax would “also provide a reason for companies that have already outsourced jobs to bring them back.”

… From 2001 to 2003, 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.

If AP’s alleged journalists had done research that took yours truly all of about 10 minutes, it could have informed readers that the “exodus” to which Schumer refers hasn’t been happening for at least five years.

Three executive summaries available at the National Association of Call Centers (NACC) inform us that U.S. call center employment has generally grown, even through the severe nationwide recession.

First, here’s a bit of the Fourth Quarter 2008 Executive Summary (bolds are mine throughout; links are to small PDF files):

In the fourth quarter of 2008 more call center jobs were lost in the United States than were gained for the first time since the data was collected going back to 2005. This loss of jobs in the call center industry was tied directly to the recession within the United States economy.

In case the AP needs to buy a clue, the excerpted paragraph tells us that the industry gained jobs for three or more years until its job growth finally succumbed to the recession.

Next, there’s the following from the Second Quarter of 2009:

In the second quarter of 2009 more call center jobs were added in the United States than were lost suggesting a continued recovery from the recession low of fourth (4th) quarter 2008.

So despite the fact that the economy as a whole lost hundreds of thousands of jobs a month during the first six months of 2009, call centers showed net employment gains.

Finally, this is from the Fourth Quarter 2009 Executive Summary:

In the fourth quarter of 2009 more call center jobs were gained in the United States than were lost creating a three quarter long job recovery from the recession low of fourth (4th) quarter 2008.

The NAAC only makes its Executive Summaries available to the public, generally providing specific employment numbers only to members. But I suspect the organization would have been glad to give AP reporters some details if only someone had called them. Maybe the wire service should set up an outbound call center that will do the follow-up work its reporters seem incapable of doing.

The bottom line is this: Exodus, schmexodus. Senator Schumer’s interest in a foreign call center tax has almost nothing to do with jobs. His primary interest is to create yet another ongoing money pot for a government that will not control itself.

Shame on the insufferably lazy AP for giving the New York senator argumentative cover.

Cross-posted at NewsBusters.org.

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2 Comments

  1. Here’s another little tidbit from the article:

    ““If we want to put a stop to the outsourcing of American jobs, then we need to provide incentives for American companies to keep American jobs here,” Schumer said last week.”

    So he considers a taxation penalty an incentive for keeping ‘American’ jobs here? How ’bout lowering the overall corporate tax rate? That’d be a much bigger incentive than any tax penalty…

    Comment by Maggie — May 31, 2010 @ 9:24 am

  2. #1, of course lower taxes would be an incentive. But that would leave less money for Chuckie to hand out.

    As an NB commenter pointed out, this tax is a de facto tariff.

    Comment by TBlumer — May 31, 2010 @ 2:03 pm

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