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U.S. jobs continue to flow overseas

Though some companies have actually moved operations back to American shores recently, the lure of cheaper labor in China, India and other foreign countries is more irresistible than ever.

October 06, 2010|By Don Lee, Los Angeles Times

One example is Allstate Insurance Co., which in June opened a $12-million call center in San Antonio, where the company expects to have 600 employees by year's end. Customer sales and service reps earn a base salary of $27,000.

In picking Texas, the Northbrook, Ill., firm passed up sites in India and the Philippines, said Thomas Wilson, Allstate's chairman.

"I'm a believer in offshoring," Wilson said in an interview, noting that his overseas offices have helped Allstate operate around the clock and compete with rivals that also have gone abroad for services.

But even though labor will cost more in San Antonio than in India, Wilson hopes for a bit of a public relations boost from the move.

In a customer survey, he said, "81% of the people said they would think better of the company even if it costs more."

Even so, Wilson doesn't see his company's overall domestic employment changing much anytime soon. And although there are some examples of in-sourcing, their numbers don't add up to a lot compared with the jobs being lost.

President Obama has complained that the U.S. tax system encourages companies to invest and hire abroad, but a bill that would have ended certain tax credits and deferrals to companies expanding or moving overseas was voted down in the Senate last week.

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