Campus Chronicle

Issue date: 11/1/05 Section: Viewpoints and Perspectives

At a recent dinner party hosted by my neighbors, a young immigrant couple, the wife curiously asked me an honest question: How was it possible that when she dialed a phone number to an American customer service representative - she always seemed to get connected to someone in India, where they never seemed to understand her questions or know how to help her - was something wrong with her phone? My neighbor was experiencing her first run-in with a major U.S. bank's customer service - who has long outsourced their call centers to India. Her frustrations were the ones that I and many other customers have dealt with for years. Over the years, I have developed a system to get around calling a foreign call center. If you call during the day, you get a pleasant knowledgeable lady with a lovely southern accent. However, if you call too late, repeatedly ask for the supervisor and you will eventually get transferred back to a U.S. customer service agent. The sad reasoning is that despite how highly educated and over-qualified the foreign engineers manning the phone lines are, or how hard they honestly work to do their best, or how diligently detailed they make their troubleshooting prompting software programs to answer your questions, the end result is a customer service system that fails at providing good service. Even after years of steady improvement, the outsourced overseas call centers fall short of the quality service that is provided by U.S. based ones. Does it matter? Obviously not enough, I have not switched banks after four years of digruntlement.

The Decline of Manufacturing and the United States as the Service
Industry Powerhouse

This is the key that underlies the cheap revolution and has been a fact of life in the manufacturing sector of the economy. There is no longer an expectation that your washing machine, your television, or your computer is going to last forever. Products can be made cheaply by outsourcing production to overseas sources and factories in undisclosed, underdeveloped parts of the world. After a couple of years, prices will drop dramatically as new products come onto the market. Instead of going to the TV repairman that once existed on the corner when the vacuum tube burns out, you just go to the Mega Electronics Superstore and purchase a new and bigger one. Economists and politicians have only half-heartedly fought off the loss of manufacturing jobs to overseas sources. One of the principle arguments is that the U.S. economy is 70-75% based on the service industry. Manufacturing is old world, low skilled, and low on human capital. Thus, it should be allowed to go extinct in America. The service industry, on the other hand, is based heavily on human capital - accountants, lawyers, investment bankers, marketing companies, the entertainment industry, and the travel industry. U.S. workers should get a better education, stop being laborers, and start wearing white collared shirts. As a result, we will instantly be differentiated in regards to the extra value added that we give to the services we provide, thus, allowing us to command far higher salaries then the rest of the world. Another part of the argument is that production can easily chase cheap labor costs overseas, but the service industry is immune to outsourcing - you can't outsource store clerks, teachers, car mechanics, lawn car services, software development, or customer service representatives - Oops!! Maybe the service industry is not immune. Beware our jobs, yes even legal work, may be the next to go.

Continued...

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