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4/23/2012
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U.S. Suspends Controversial Outsourcing Training Program

Funding stopped for USAID program that trained students in the Philippines to work in offshore, English language call centers serving U.S. companies.

2012 Salary Survey: 12 Career Insights
2012 Salary Survey: 12 Career Insights
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The U.S. Agency for International Development has suspended funding for a program under which Filipino nationals were trained to work in offshore, English language call centers that serve U.S. companies. The program, first reported by InformationWeek, drew heavy criticism from lawmakers who said it posed a threat to American call center workers.

"In response to the concerns you have raised, the Agency is suspending its participation in the English language training project in Mindanao pending further review of the facts," said USAID deputy assistant administrator Barbara Feinstein, in a letter Monday to Congressman Tim Bishop (D-N.Y.). "Furthermore, the Agency has established a high-level taskforce to review these matters."

Bishop and fellow Congressman Walter Jones (R-N.C.) on Friday wrote to USAID administrator Rajiv Shah to complain about the program, known as JEEP (Job Enabling English Proficiency). JEEP used USAID funds to train students in the Philippines troubled Mindanao region, which has seen unrest by Muslim activists, to work in call centers and other industries.

Feinstein said JEEP was initially conceived as a way to help students in the region integrate into Filipino society. "The intent of the program is to enable these youth to make productive contributions to society, and to reduce alienation and marginalization that may make them vulnerable to the influence of terrorism and extremism."

[ Is India's outsourcing economy running out of steam? See Indian Outsourcing Model Over, Says HCL Exec. ]

But Bishop said that USAID needs to find ways to assist developing regions without compromising the jobs of U.S. call center workers, many of whom have lost employment after their jobs were outsourced to the Philippines. "We have foreign policy imperatives, we have international development imperatives. But our number one imperative has to be the protection and creation of jobs here in this country," Bishop said in an interview last week.

"We have a serious jobs deficit in this country and the fact that we would spend U.S. taxpayer dollars to prepare foreign nationals to take over jobs that can easily be done by Americans is shocking" he said. AT&T, Expedia, and JPMorgan Chase are among the U.S. companies to have outsourced call center operations to the Philippines. Bishop said more than 500,000 call center jobs have moved offshore in the past five years.

USAID terminated a similar program in Sri Lanka less than two years ago, following a report by InformationWeek.

JEEP is part of a larger USAID initiative in the Philippines, known as Growth and Equity in Mindanao (GEM), on which the agency is spending about $100 million per year, according to an audit last year by the USAID Office of Inspector General.

A JEEP document published by USAID notes that the program "is classroom based, and focuses on the specialized English skills required by employers in areas such as: nursing and allied healthcare; maritime services; travel and tourism services; business process outsourcing (BPO); and other areas of international employment."

There are about 23,000 Filipino students currently enrolled in the program, which requires 400 hours of training over two years.

Nominate your company for the 2012 InformationWeek 500--our 24th annual ranking of the nation's very best business technology innovators. Deadline is April 27. Organizations with $250 million or more in revenue may apply for the 2012 InformationWeek 500 now.

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Certifiable
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Certifiable,
User Rank: Apprentice
10/27/2012 | 5:47:37 PM
re: U.S. Suspends Controversial Outsourcing Training Program
"Just because there is a call center in the Philippines which employs English speakers does not make it an outsourcing center for U.S. jobs. Other countries in the world also speak English - England, for example."

Fine, then those English speaking countries can pay to train the Philippino call center workers, rather than the American taxpayer, which has a demonstrably larger loss of call center jobs than all the other English speaking countries COMBINED. Your willful blindness to the CAUSE (training Business Process Outsourcing workers in Philippines) and EFFECT (outsourced American jobs admitted by the very same companies doing the outsourcing) just proves your crony capitalist myopia. Your belief in free markets doesn't mean that American taxpayers should pay for other nations' workforce training for free!

"A sad case of American isolationism and protectionism which is making our country just a little bit weaker and a little bit less safe."

Offshoring call center jobs ABSOLUTELY makes our country weaker in both financial and military ways! Given that the middle class, whose spending represents 70% of US GDP and is the very foundation of the American economy; why would anyone ever advocate reducing their spending, which is necessarily tied to their job losses due to offshoring? For every dollar of US income lost, GDP and tax revenue go down, but our government spending has to go up to pay for unemployment benefits. Meanwhile, our growing deficits diminish our ability to pay for military action and protection from terrorists around the world. Sounds like a LOSE - LOSE proposition to me!

Realize that offshoring business processes allow a company to take a massive tax break for the expenses of mass layoffs and setting up operations elsewhere, which necessarily reduces their profit and IRS tax debt. Furthermore, if that offshored business process is set up as a foreign subsidiary, any and all income derived from that process/subsidiary is not taxable by the IRS until that income is redistributed back to the US parent company, which may be years, if ever. So BILLIONS of US corporate profits are tied up in foreign banks, which are being invested in foreign economies and interests, but definitely not in the American economy. Such enlightened thinking by our corporate "partners", which would have you believe that these are the inevitable results of "globalization"! They are the result of GIANT US tax loopholes that have to be closed to stem the bleeding of the US economy.
Nuaka
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Nuaka,
User Rank: Apprentice
5/2/2012 | 12:42:34 PM
re: U.S. Suspends Controversial Outsourcing Training Program
Very sad that an industry-funded hack journalist can misrepresent a solid foreign aid project as "call center outsourcing" and have it shut down because of the spineless aid agency's fear of pushing back just a little bit in an election year. The point of that project, seemingly, was to try and train young people in a conflict-torn area with English-language skills that they can use to look for jobs in "healthcare; maritime services; travel and tourism services; business process outsourcing (BPO); and other areas of international employment". In case the nearsighted IT sector folks can't understand that, let's make it clearer. We don't want people fly airplanes into our buildings, and this is the kind of project that means to make us safer by reducing the supply of such people. Furthermore, all call center jobs on Earth do not belong to Americans. Just because there is a call center in the Philippines which employs English speakers does not make it an outsourcing center for U.S. jobs. Other countries in the world also speak English - England, for example. A sad case of American isolationism and protectionism which is making our country just a little bit weaker and a little bit less safe.
rlawson346
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rlawson346,
User Rank: Apprentice
4/30/2012 | 1:39:53 AM
re: U.S. Suspends Controversial Outsourcing Training Program
The fact that the program ever existed in the first place is a sign that we (the voters) need to do some serious house-cleaning in 2012. This isn't a choice between Democrats and Republicans since both parties have sold out - which is a natural result of our campaign finance laws.

We need to defeat Crony Capitalism. I'm all for capitalism, but not crony capitalism. Step one is to only vote for those who will support an amendment to the Constitution to define a person as a human being and to allow limitations to be placed on campaign contributions. They have argued that donating money is a protected form of speech; we need to address this in the Constitution.

There are many other things we need to do, but we won't be successful in those things until we first declare war on crony capitalism.

BrandoSerna
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BrandoSerna,
User Rank: Apprentice
4/26/2012 | 3:37:37 PM
re: U.S. Suspends Controversial Outsourcing Training Program
How about the outsourced jobs that are still existing at China and India. Has anybody forgotten about it? We should be more concerned on the outsourced jobs on these countries which for years and years have contributed to the unemployment of many American workers. Why do you pick on small Asian countries which have been allies of the US while keeping a closed eye on China which is intent on controlling the world.
Certifiable
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Certifiable,
User Rank: Apprentice
4/25/2012 | 6:16:39 PM
re: U.S. Suspends Controversial Outsourcing Training Program
Kudos to Information Week for stepping up to the plate and helping out the American workforce! I was beginning to wonder if you were only about the pros of outsourcing and not much about the cons. This proves you are willing to take a more balanced approach than all the cheerleaders out there for unrestrained capitalism. Good job!
BrainiacV
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BrainiacV,
User Rank: Apprentice
4/24/2012 | 6:05:49 PM
re: U.S. Suspends Controversial Outsourcing Training Program
"We have a serious jobs deficit in this country and the fact that we would spend U.S. taxpayer dollars to prepare foreign nationals to take over jobs that can easily be done by Americans is shocking"
He forgot to say "Cheaper"
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