Search News
For the Media
For media inquiries, call CWA Communications at 202-434-1168 or email comms@cwa-union.org. To read about CWA Members, Leadership or Industries, visit our About page.
Outsourcing Hurts Workers, Business, Cohen Tells World Bank Audience
Invited to give labor's view of outsourcing to a World Bank conference, CWA Executive Vice President Larry Cohen said the cycle of contracting out services to the cheapest labor markets is bad for workers, for consumers and for economic growth, leading "to a relentless global race to the bottom."
Cohen, president of UNI Telecom, the telecommunications branch of Union Network International, was asked to represent the organization at the June conference in Washington, D.C. UNI encompasses more than 900 unions with 15 million members in 150 countries.
Thanking the organization for giving workers a forum, he said, "We believe quite passionately, as I'm sure no one will be surprised, that if workers don't participate, the consequences are disastrous. This debate should not be about outcomes simply of income or even health care, as important as those are, but about whose world is it, who participates in decision-making."
He explained that UNI and CWA focus more on "outsourcing" than on "offshoring" - understanding that it's a problem whether the work is sent down the block to low-wage workers or across the ocean where pay is even lower.
"From our point of view, the location of the outsourced work is not the issue," he said. "Rather, we are concerned about the forces that are driving companies to shed core business functions, to contract out work to the lowest cost bidder, and to sever the relationship between the worker and the employer."
He said it's not an issue of American workers "versus workers somewhere else. It's not about championing our development and depressing somebody else's." Rather, he said it's about good, sustainable jobs worldwide that respect workers' rights and give employees a sense of pride in the products they make or services they provide.
To make his point, he told stories of workers he's met around the world. He spoke of call center workers at an outsourcing firm in Mexico City "having no breaks, working for incredibly low pay" and persevering in their fight for collective bargaining despite the company's and the government's opposition. He told of customer service representatives in Korea who learned their jobs were going to be outsourced, a group of women so committed to saving the jobs that they shaved their heads as a form of solidarity.
He told of a New Zealand company that outsourced all its telecom jobs over three years, blinded by the potential profit. But it wasn't just workers who suffered. "Today, 10 years later, rural areas now pay more than in urban areas for telecom services," Cohen said. "There's virtually no delivery of high-speed Internet in rural areas."
In the United States, and for CWA, Cohen said the "first moment of extreme pain with these stories was Christmas of 1986," involving 500 MCI workers in Southfield, Mich., organized in the customer service center, most of them African-Americans.
"They were told one day, 'Tomorrow you'll go to five different hotels.' Seemingly for education. When they got to the hotels, they were told that 'Yesterday was your last day of work, we've contracted out the work, we moved it to Iowa, and you have 15 minutes to make an appointment to clean out your desk.'
"These stories - and they go on and on and on - are everywhere," Cohen said. "And the question really is, when work is outsourced, what is the accountability, what is the responsibility of the service provider, what is our responsibility as folks interested in development and sustainability, and where are the human rights that those workers need to change their own world?"
He stressed to his business audience that it's about service as much as jobs, that "hollowing out" the core functions of a business has consequences. Quoting a business leader, Sidney Harmon, Cohen said, "what he said was, it makes no sense to outsource core functions because you lose, as he put it, 'the love, the creativity, the commitment to the product, and at the end of the day you really have nothing left.'
"I think that, for us, from the employee point of view, it isn't just about the wages or the health care," he said. "It's about the work that we do every day, and our connection to that work."
Cohen, president of UNI Telecom, the telecommunications branch of Union Network International, was asked to represent the organization at the June conference in Washington, D.C. UNI encompasses more than 900 unions with 15 million members in 150 countries.
Thanking the organization for giving workers a forum, he said, "We believe quite passionately, as I'm sure no one will be surprised, that if workers don't participate, the consequences are disastrous. This debate should not be about outcomes simply of income or even health care, as important as those are, but about whose world is it, who participates in decision-making."
He explained that UNI and CWA focus more on "outsourcing" than on "offshoring" - understanding that it's a problem whether the work is sent down the block to low-wage workers or across the ocean where pay is even lower.
"From our point of view, the location of the outsourced work is not the issue," he said. "Rather, we are concerned about the forces that are driving companies to shed core business functions, to contract out work to the lowest cost bidder, and to sever the relationship between the worker and the employer."
He said it's not an issue of American workers "versus workers somewhere else. It's not about championing our development and depressing somebody else's." Rather, he said it's about good, sustainable jobs worldwide that respect workers' rights and give employees a sense of pride in the products they make or services they provide.
To make his point, he told stories of workers he's met around the world. He spoke of call center workers at an outsourcing firm in Mexico City "having no breaks, working for incredibly low pay" and persevering in their fight for collective bargaining despite the company's and the government's opposition. He told of customer service representatives in Korea who learned their jobs were going to be outsourced, a group of women so committed to saving the jobs that they shaved their heads as a form of solidarity.
He told of a New Zealand company that outsourced all its telecom jobs over three years, blinded by the potential profit. But it wasn't just workers who suffered. "Today, 10 years later, rural areas now pay more than in urban areas for telecom services," Cohen said. "There's virtually no delivery of high-speed Internet in rural areas."
In the United States, and for CWA, Cohen said the "first moment of extreme pain with these stories was Christmas of 1986," involving 500 MCI workers in Southfield, Mich., organized in the customer service center, most of them African-Americans.
"They were told one day, 'Tomorrow you'll go to five different hotels.' Seemingly for education. When they got to the hotels, they were told that 'Yesterday was your last day of work, we've contracted out the work, we moved it to Iowa, and you have 15 minutes to make an appointment to clean out your desk.'
"These stories - and they go on and on and on - are everywhere," Cohen said. "And the question really is, when work is outsourced, what is the accountability, what is the responsibility of the service provider, what is our responsibility as folks interested in development and sustainability, and where are the human rights that those workers need to change their own world?"
He stressed to his business audience that it's about service as much as jobs, that "hollowing out" the core functions of a business has consequences. Quoting a business leader, Sidney Harmon, Cohen said, "what he said was, it makes no sense to outsource core functions because you lose, as he put it, 'the love, the creativity, the commitment to the product, and at the end of the day you really have nothing left.'
"I think that, for us, from the employee point of view, it isn't just about the wages or the health care," he said. "It's about the work that we do every day, and our connection to that work."