Idaho becomes leery of assisting some call center operators

In the past eight years, the state has provided an estimated $15 million to train prospective employees for the call centers that account for many of Idaho’s new jobs, especially in rural communities.

The Times-News and
The Associated Press

http://www.magicvalley.com/news/business/index.asp?StoryID=6203

At one point, 70 companies operated call centers, employing over 12,000 people from Smelterville in the Panhandle to St. Anthony in the Upper Snake River Valley to Burley in south-central Idaho.

But economic development officials are becoming leery of the industry following recent layoffs and center closures. In Magic Valley, for instance, Tele-Servicing Innovations’ Jerome call center closed in October 2002, displacing 60 workers, and its Burley call center closed in November 2002, laying off 51 full-time workers.

Leandra Burns, a planner for the state Workforce Training Fund, said job training assistance from the employer-financed fund is being limited to companies setting up their own in-house call centers, like Dell Inc. did in Twin Falls in early 2002. She said so-called third-party centers relying on contract work from other companies, "would fluctuate too much in employment."

Center Partners in Coeur d’Alene was a prime example. The Colorado-based company, which contracts with the telecommunications industry to provide customer service over the phone, got nearly $2.4 million from the state to train 1,200 workers in Kootenai County. But employment shrunk to about 400 in late 2003 after the company lost a large contract.

It is hiring again now but without state assistance to train new workers.

"I respect the rationale behind making the change," said Martha Lanaghen, Center Partners’ vice president of sales and marketing. "Our business has been unstable."

Since 1996 when the training fund was established, about a third of the money funneled to call centers has gone to third-party operations like Center Partners. Companies received up to $2,000 to train each worker and as much as an extra $1,000 if the job is in a rural area.

Roger Madsen, director of Idaho Commerce and Labor, defended the focus even though some of the jobs were short-term.

"The purpose of the fund is to train workers, and get them into higher-paying jobs," Madsen said. "Those employees may have gone to work at other call centers."

The jobs pay an average of $9 per hour and most include health benefits. But they are a far cry from the wages of lost timber, mining and high-technology jobs, and there remains a debate on whether they do little more than expand the ranks of the working poor.

Three years ago, the Northwest Job Gap study defined a living wage job for a single Idaho resident as $10.11 per hour, or just over $21,000 per year. It was based on a monthly budget of $379 for rent, $141 for food, $58 for health care and $130 for savings. A single adult with a child would need $12.82 an hour to meet basic needs.

Steve Griffitts, president of Kootenai County’s nonprofit Jobs Plus agency that has recruited several call centers, conceded the pay would probably not support a family of four. But he declined to discount the value of the jobs.

"They’re entry level jobs. They’re career enhancing fields. They provide benefits," Griffitts said.