The Political Economy of an Outsource
Call Center Job
Or How To Cut Through the Boss’s BS
(Rebel Youth)
By Bilal Awami
At almost any job you’ve had you’ve
probably wondering why things were setup the way they were. If you
asked a manager you would probably get a BS answer that stops making
sense if you dig deeper. Talk at work probably included trying to
figure out what was really going on.
Political economy is the science of how
we relate to each other in making wealth, which under capitalism is
for those who own the equipment we use. An outsourced call centre
might do the same physical work as an in-house call centre, but the
difference is with outsourcing are making a direct profit for the
owner by the call. Marx wrote that in his time people who didn’t
make anything physical but still made a profit for someone, and so
are “productive” in the capitalist sense, were very few. Today
however, according to the Government of Canada, Canadian outsourced
call centres pull in US$14 billion/year and are the second-biggest
market after to India.1
Understanding the political economy of
where you work is important for figuring out what’s really going
on, why things are setup the way they are, and where they are headed.
It isn’t as simple as it looks from the surface: as Marx said if
things worked on the inside the way they looked on the outside we
wouldn’t need science to tell us anything.
This is just a taste of what lurks
behind the way your workplace is setup. Dig into your own
workplace’s political economy and write in to Rebel Youth with what
you and your co-workers have figured out.
1. Why don’t they let us work all
the overtime that’s available, they’d still be making more they
pay us even with overtime?
It’s true that call centre
outsourcers pull in so much more money per hour or minute or call
than they pay, that they could be paying overtime and still make a
profit. It might look like a win-win to get lots of overtime so you
can make money while the call centre owner makes money too. But it’s
the profit rate (profit per $ spent) and not actually profit
that the call centre owner is after. This rate has to be a higher
than what other industries (not just other call centres) offer.
Think about it from the perspective of
an investor. If an investor is going to put in a dollar, they don’t
just care that you will bring in some money on that dollar,
they want to know how much so they don’t invest somewhereelse.
Even though with paying overtime the total profit will be
higher for the call centre than not having anyone do the work they
don’t have people for, it would lower their profit rate
since you would get to keep more of the money that’s brought in
than if you were working the regular wage rate. In other words, the
rate of exploitation is lower when you are paid overtime
because the owner gets to keep less of the money you bring in.
So the call centre owner would rather
make a lower total profit, and have less calls answered, than
taking a lower profit rate by paying for overtime for someone
to take the extra calls they didn’t schedule people for.
There are some situations where call
centre owners will want people to work a lot of overtime
however, if the penalty for not answering a certain number of calls
is looking too high for example.
2. Why do supervisors send us home on
VDT (Voluntary Down Time) when I know that there will be more
calls coming than the people who are left can handle?
Outsourced call centre managers are
judged on the profitability of their queue or section or department.
But even the managers and supervisors ultimately can’t make
whatever decision they want, they have to defend their decisions
based on call forecasts from the client.
The forecasts are based on a
mathemetical model, called the Erlang C equation, which basically
assumes a random distribution except that some people will give up
and call back later. However, call centres often don’t know day to
day how many people are out there who would want to call (the
customer universe), so the model is a guide at best. The model might
tell you, based on last year’s calls, when there will be a bump in
calls, but not how big of a bump.
For this reason managers think it’s
better to make a safe decision they know is wrong that they can
defend with the client’s forecast than take a risk in keeping
people on that could end up costing them unnecessarily if they’re
wrong, because when the managers are put on the spot by their
managers the upper management can pull out the forecast and blast
them for wasting money when the forecast said there wouldn’t be any
calls coming in. On the other hand, if calls gets missed because
more came in than were forecast, the manager can always hide behind
the forecast and blame the client.
3. Why do they care so much about my
being late – is it because they don’t want too many calls to be
in queue?
Outsourced call centres will want you
to be on time even if there are no calls in queue, it has nothing to
do with catching calls. Their forecasts for how many calls are
coming in aren’t that accurate.
The real reason call centres are big on
tardiness is because they make money for every minute you are on the
phone or taking a call or, in some cases, in your seat regardless of
whether there is a call or not. Losing money because agents aren’t
bullied enough for tardiness by a manager will make the manager look
like they can’t manage to their supervisors, and since
tardiness is one of the things managers think they can control more
than other things they will pick on tardiness. They might excuse it
saying it puts stress on the team to not have someone who is
scheduled there to take calls in queue, but that’s not why the
manager cares about attendance.
4. What does the outsourced call
centre’s profit rate have to do with auto and steel, or general,
profit rates?
Outsourced call centre’s biggest
expense per dollar spent on a call is the wage they have to pay a
worker – their variable cost of production (taking calls which
bring in money). The fixed costs of the telephone bill and equipment
you use is relatively low. Call centres are labour intensive rather
than capital intensive, constant capital (the means of production) is
low compared to labour costs. In other words the “organic
composition” of capital is low (less constant capital than variable
capital). With auto and steel plants the organic composition of
capital is high: the equipment and raw materials that go into a car
or roll of steel take up more per dollar invested than the labour
that makes the wealth.
Because profit is made from only the
labour and not the equipment and raw materials, i.e. a telephone or
car factory only makes money while someone is working on it, call
centres should have a higher profit rate than auto and steel
factories (more profit per each dollar invested). This is
because more of a dollar spent in a call centre pays for work
bringing in money than in an auto plant or steel factory, where for
each dollar spent much more of it is going into equipment than the
labour. An hour of labour might produce more in an auto plant or
steel factory, but the capitalist’s dollar doesn’t buy as much
labour there because more of the dollar goes to the expensive
equipment and raw materials. Remember the profit rate is per
dollar invested in both capital and labour, not how much you get out
of an hour of labour which is the exploitation rate.
But outsourced call centres aren’t in
a different society than auto and steel factories, capitalists can
shift their dollars from auto and steel plants with lower profit
rates to call centres with higher profit rates. Capitalists don’t
care about the total profit as much as the profit rate, since
to maximize profits they need to make more for each dollar they put
in. In this way in capitalist society as a whole more investment
goes for a while into industries with higher profit rates, until
because of competition from all these capitalists crowding into call
centres the profit rate goes down in call centres, and goes up in
auto and steel factories from capitalists pulling out and decreasing
competition. In this way most of the businesses in a
capitalist society end up with a similar, average rate of
profit. If any industry could do better than average, and they do,
capitalists would crowd into there and drive the profit rate towards
a new average. This is constantly happening under capitalism as the
economy develops.
So what does this average rate of
profit under capitalism mean for your call centre job? It means that
the profit rate the owner of your call centre takes in doesn’t just
depend on the industry your calls are in or the call centre industry
itself, but it depends on the whole of capitalist society and what
the average rate of profit is.
From my own call centre company’s
numbers there are different minimum profit rates to do business in
different countries. Profit rates from centres in underdeveloped
ex-colonies are about 150% the rate for an imperialist country like
Canada. 40% profit might be super in Canada but won’t cut it in
the Philippines. This is related in part to less capital-intensive
industry (lower organic composition of capital) in ex-colonies, but
that is changing.
Notice how because call centres will
initially turn a higher profit for each dollar invested (even though
they may require fewer dollars), their profit rates go down from the
competition from the different capitalists getting in to the
business. This means call centres end up charging their clients less
than the value of the calls they take as the price is driven down by
competition. Similarly in capital-intensive (high organic
composition) industries, because there is decreased competition from
a lower profit rate (less profit per dollar invested because more of
the dollar goes to equipment and raw materials that doesn’t do
anything by itself), they can sell their goods for a higher price
than the real value since there is much less competition.
This means that when you look at what’s
happening from the perspective of capitalist society as a whole, the
value produced by workers in industries with a low organic
composition of capital is effectively “moved” to the capitalists
in industries with a higher organic composition of capital by the
averaging out of profit rates.
In other words, when you take a call
you are not only making money for the owner of your call centre but
also for the owner of an auto plant or steel mill. More broadly,
under capitalism workers aren’t just making money for their
employers but as a class we are making money for the capitalists as a
class. This is a big reason why call centre workers should be in
solidarity with their brothers and sisters in auto plants and steel
mills, and vice-versa. This analysis is not obvious and requires
some serious following of the money, as Marx said in Capital III “The
actual difference of magnitude between profit and surplus value
(money you bring in over your wage) … in the various spheres of
production now conceals completely the true nature and origin of
profit, not only for the capitalist who has a special interest in
deceiving himself on this score, also for the labourer.”2
1
“Canada’s Key Sectors”, Government of Canada
(http://investincanada.gc.ca/eng/publications/invest-in-canada-brochure-summary.aspx
)
2
Capital vol. 3, Karl Marx, Kerr Edition, p. 198
