Wise Virginia Call Center Won't Hire 500 New Workers

by Lewis Loflin

Southwest Virginia politicians are celebrating the opening, supposedly, of the new call center in Wise, Virginia.

Their own economic development reports claim we shouldn't be dependent on call center jobs, but that is all we seem to get. In this case taxpayers will be plunking down $7.6 million for 50 jobs. Something called Frontier Secure will get the handout, while public officials are somewhat vague on what jobs will actually be created. What is disturbing is their attitude towards local college graduates.

According to studies by King University in Bristol call center jobs typically pay about the same as an unskilled retail or nursing home job. A typical mining job returns $127,595 in household income, while a call center job returns $27,000. It takes approximately 4.7 call center jobs to replace the household income of a single mining job. This is based on the ripple-effect through the entire local economy.

Wise, Virginia is home to University of Virginia at Wise campus. In nearby Big Stone Gap Virginia is Virginia Highlands Community College. This so-called call center will be working with local colleges to secure their workforce. This is completely absurd! Who is going to get a college degree for $8-$9 an hour job? This is a particular problem with Clinch Valley College a.k.a. UVa Wise, where students can incur tens of thousands of dollars in debt. Being that most of their liberal arts degrees are useless anyway, they certainly can't afford this kind of low-paying employment.

In a study from 2001 with LENOWISCO (meaning the Counties Lee, Wise, Scott, City of Norton) noted of call centers which several brought in since that time have moved on:

The region is doing slightly better than state and national averages for high school graduates. However, the area lags both college categories, with a notable lack of college graduates (including advanced degrees), which is probably related to the lack of appropriate jobs in the region.

The lower figure for "Some college" (includes no degree and two year degree) is a potential danger signal. As manufacturing jobs are moving offshore, the new jobs being created generally require some college education and a higher degree of technical skill than the jobs being replaced.

The region has been replacing traditional manufacturing jobs with call center jobs, which provide limited advancement and work opportunities. Call centers represent the factory floor of the Knowledge Economy; they are an important part of a diversified economic development strategy, but the region must be careful not to rely too heavily on them, as the work is easily moved to other regions and/or other countries.

See lenowisco_broadband.pdf

This nonsense is supposed to attract and retain college graduates? I hasn't in the past.

While the report is dated it's useful to see what the goals were then and what we have today. Most areas of Southwest Virginia do have affordable broadband, but this is more like a cable company or utility. This has been tried across large swaths of rural America to revitalize local economies and there's no proof anywhere it works.

Typical was the hype surrounding Northrop-Grumman opening an "IT" center in Russell County, Virginia. There's no evidence of any real job creation and there were complaints they paid less than a nearby call center. This was a government outsourcing contract project that ended up being a help desk call and data backup center they claim, while the 700 IT jobs we were promised I think were outsourced to India. I know people that had IT degrees who never could get a job there and their parking lot stays largely empty. I went to their job fair held in Abingdon Virginia several years ago (paid for by taxpayers) and found out the $57,000 a year jobs they promised paid on average $27,000 depending on experience - when I could wring the information out of their representatives. Who in the heck was going to move in the middle of nowhere and take a 50% pay cut?

There was never any intention of hiring 700 IT workers - this was part of then Gov. now Senator Warner's effort to lure Grumman into relocating to Northern Virginia. They had never even been involved this kind of IT business before and screwed up to the point now Virginia Congressman Morgan Griffith tried to get their contract terminated.

As for today to quote the press, "a job fair will be held at UVa Wise Convocation Center on July 8-9 to hire the first 50 people". There is no timetable for guarantee of any additional jobs. $5.6 million of the $7.6 million is supposed to be a loan, but going by past experience will never be paid back. The center will be opening August 14, 2016. I'll bet the taxpayers will fund that event too. That new Convocation Center cost $30 million.

The question becomes, what happened to the Sykes call center in Wise? We were promised 500 jobs with this fiasco that never materialized. Many of those workers that they did hire have been laid off. Then the taxpayers built another $25 million industrial park centered on another Sykes call center in Buchanan County Virginia. That has proven to be a fiasco. Sykes was terminating its Wise County employees at the same time hiring new workers in nearby Buchanan County.

See Tobacco Commission Sykes Fiasco.

That's not counting the Travelocity fiasco that claimed 550 new jobs yet never hired over 230 then closed down. $10 million down the toilet.

These will not be new jobs all, but rehiring laid-off Wise Sykes and Norton, Virginia relay center employees. These "new hires" will be earning less and be entry-level employees.

There's no way to really track if any people will be actually employed. The Virginia Employment Commission sensors such information - even the schmucks handing out the grants aren't allowed access. Thus there is no way to find out anything until too late. Ref. BHC June 30, 2016.





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