How American Corporations Exploit the Global Poor Through Outsourcing and Subcontracting

There is so little interest in the American media–or even among the American left–about the actual conditions of American corporation exploitation of the global poor, that it’s rare to even hear about it. Thus, I was glad to talk to Kalena Thomhave for her piece in the American Propsect on how Comcast is making money off exploited call center workers in the Philippines who are fighting for a union. Comcast is claiming they have no say over the matter, but of course also demand cost and quality control from the contractor. Let’s look at how this works:

The [labor] situation in the Philippines is really dark,” Siwa tells me. The problem goes well beyond the authoritarian Duterte administration, to the systemic low pay and abuse of contractor labor. Monthly base pay for workers contracted with AT&T in the Philippines, for instance, is roughly between $281 to $361, according to a 2017 report from CWA, with figures gathered from the Filipino Ecumenical Institute for Labor Education and Research.

As the Prospect previously reported, under the Republicans’ 2017 tax reforms, income that corporations earn abroad is taxed at half the rate of income earned domestically. Even before the tax reform took effect, for a company like Comcast or AT&T, “Everything in the American economy has been set up in the last 50 years to move production offshore—and [you can] then separate yourself from any responsibility for the bad conditions of production,” says Erik Loomis, associate professor of history at the University of Rhode Island and author of Out of Sight: The Long and Disturbing Story of Corporations Outsourcing Catastrophe. The subcontracting of work, he continues, “exists to protect corporations from any kind of responsibility for the workers—even though [the corporations] have tremendous power over these workers’ actual lived experience” and likely employ lawyers to ensure that workers’ efforts to unionize or win higher pay are unsuccessful.

“It’s like gravity—just moving the jobs wherever it’s cheapest and where rights can be trampled,” says Larry Cohen, the current board chair of Our Revolution and former president of CWA. He quotes the former CEO of General Electric, Jack Welch, who once said, “Ideally, you’d have every plant you own on a barge to move with currencies and changes in the economy.”

Many of the workers in the Philippines who answer calls from Comcast customers are not, for example, Comcast employees—they may well be Alorica employees instead. Alorica, a U.S. company with a subsidiary operating in the Philippines, is just one of several multinational companies operating call centers in the Philippines. Alorica employs about 40,000 people in the country, working as a third-party vendor to Comcast, AT&T, Barclays, and Citi, among others. Business is booming: Alorica Asia president Bong Borja told the Philippines’ ABS-CBN news network that the company’s growth in 2018 outperformed that of the Filipino economy. As they’re not sharing in that bounty, in 2015 Alorica employees at one call center formed a union, the Unified Employees of Alorica (UEA), which was recognized by the Filipino government. Since then, however, Alorica has refused to recognize the union and has made repeated attempts to undermine it.

One reason the workers formed UEA was the company’s attendance system, which penalizes workers even when absences are due to medical issues. This is a business strategy: According to an article on Alorica by Michael Sainato in The Guardian, “By firing workers on a regular basis, the outsourcing companies are able to replace them with even cheaper labor, while the [fired] worker has to find a job at another call center where they start over at entry level wages. As a result, the new call center receives an entry-level employee with the training and experience of a senior employee.”

While we are talking about taxing millionaires and watching our billionaires demonstrate repeatedly that just because you are rich does not mean you are smart, we might want to think about how to stop this kind of exploitation as well. As I have written repeatedly, the basic legal structure for fighting this is not all that difficult to imagine, there are several examples of the U.S. already intervening in the global labor market for this or that reason, and we can open U.S. courts to make the right to join a union enforceable anywhere American companies do business, including among their contractors and suppliers. But because Americans basically don’t care what happens in other countries, we don’t do anything or even talk about it.