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Outsourcing moves closer to home

A new trade agreement with Central America to take effect Jan. 1 tempts more US companies to try 'nearsourcing.'

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India still has a far larger pool of educated English speakers as well as a lower minimum-wage base, and often better infrastructure. But Central Americans feel they can still capture a growing share of the market, especially because CAFTA ends most tariffs on more than $33 billion in goods traded between the US and Central American signatories and protects investors in the service industry.

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"There is a hunger here for having a job, and a highly motivated group of people," says Leonel Lacayo, a Nicaraguan who lived 23 years in the US before returning home to Managua and opening the Nicaragua Call Center (NCC) last month as part of a joint venture with US-based Franklin Collections Services. Lacayo has 70 English-speaking employees who make calls to collect debts for clients such as telecom companies, hospitals, and credit-card companies.

"It would be hard to find people in the US who wanted this job because they have too many other options," he says. "But here the pay [$400 a month plus incentives] is triple minimum wage."

By January, he says, he expects to expand to 100 operators.

When it comes to call centers, says Mr. Lacayo, the accents of his operators - if they exist at all - are a big selling point. The Hispanic population in the US has risen 50 percent in the past five years to about 38.8 million, according to US Census figures.

"There are millions of Hispanics in the US," Lacayo points out. "And so even non-Hispanics have gotten used to that accent." Indian accents, by comparison, he says, "are totally difficult."

Being able to speak both English and Spanish is a plus, says Claudia Solano, one of the operators at the call center. "The best collections I make are from Hispanics," she says. "They are not used to being able to communicate." A few days ago, she says, someone told her she was "the nicest collector who ever had called."

Ms. Solano's parents fled Nicaragua during the civil war of the '80s and settled in Las Vegas where she and her older sister, Karen, also an operator here, grew up. The family moved back to Managua to care for elderly grandparents three years ago.

"I am overqualified and underpaid," says Karen Solano, speaking over the din in the large rented hall that serves as the NCC call center. "But it's really hard to get a good job in Nicaragua."

If, she says, more companies eventually invest in the country, she will be better off. "I don't want to be a collector all my life, anyway," she explains, "I want to be a supervisor. So, I am keeping my fingers crossed."

Not everyone sees the growth in nearsourcing in a positive light.

"We are sorry about this phenomenon," says Thea Lee, the AFL-CIO's deputy director for public policy. "We are sorry anytime we lose good jobs here in the United States and we are also sorry we did not succeed in yielding stronger protections for Central American workers in CAFTA."

The AFL-CIO lobbied against the trade agreement, which squeaked by with a two-vote majority in the House of Representatives and a nine-vote margin in the Senate.

Ms. Lee disagrees with the argument that sending jobs to Central America will mean there will be fewer illegal immigrants in the US competing for jobs.

"It's a common business line, but there is very little truth to it," she says. "We don't believe that more trade will do much to lift people out of poverty. It will enrich the rich. We want Central America to be more stable, but we don't think this nearsourcing will deliver that."

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