Do Not Call List Impacts on Call Centers

Most of the media reports of the employment effects of enforcing the do-not-call list overstate the true implications. Call center employment actually peaked in 1998, well before the recession started, as call centers began to move overseas in larger numbers. The recession hastened the decline in domestic call centers, but the decline is likely to continue even if the do-not-call list were to disappear.

Bureau of Labor Statistics (BLS) numbers indicate that U.S.employment at telephone call centers peaked in late 1998 at about 425,000 jobs (see chart). Following six years of strong growth, the industry’s payroll shrank by a modest 3.5% during the 1999 to 2000 period, even as the overall economy continued to grow at a rapid pace. The recession in 2001 and the subsequent weak economic recovery have caused a further decline of nearly 12% since January 2001.

The timing of the call center employment contractions is important, because it shows that the industry ceased to be a growth industry two years before the onset of recession. Thus, it is likely that a significant portion of the industry’s contraction is structural. Indeed, it could continue to shrink as the economy expands, much like it did in 1999 and 2000, with or without the do-not-call list.

Also, it is important to note that the discussion about call center jobs and the implications of the do-not-call list relates solely to outgoing telemarketing calls. The do-not-call list has nothing to do with customer-initiated service calls, and so again, the argument that the list would cause significant job losses at call centers loses some of its punch.

Regardless, many call center jobs are moving overseas, where labor is less expensive than the small U.S.metropolitan areas or rural areas where call centers were apt to locate in the past. Judging from the peak of call center employment in the U.S.relative to overall employment growth, overseas call centers have been growing faster than the overall economy for several years now.

Although there are few hard numbers, India, Philippines and, to a lesser degree, South Africa have seen increases in the number of call center employees supporting U.S. business operations. In India, call centers are believed to be the fastest growing segment among all of the business support activities moving to that country. Considering this, it is possible that the do-not-call list will have a greater job impact overseas than it will here in the U.S.

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