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Exploring the Geographic Shifts (and Low Wages) of the Call Center Industry

May 14, 2013 by Joshua Wright

A decade ago, America’s telephone call center industry was clustered in a handful of states with small populations and cheap labor: Utah, Nebraska, West Virginia, Iowa, South Dakota, and North Dakota. Five of those six states have watched at least a quarter — and in North Dakota’s case, 67% — of their call center workforce vanish since 2002. But nationally, the industry has taken off in that time, growing 20%.

So where’s the rapid job growth for telemarketers and other call center workers happening? You guessed it: mostly in other small states with low wages, like Montana and Idaho.

The call center industry has undergone major geographic shifts over the last decade. Florida has added more than 18,000 jobs and now has the second-largest call center workforce, behind Texas. Six other states, led by Ohio, have added at least 5,000 jobs. Montana has grown 200% and Idaho 153%, while three Midwestern states (Illinois, Iowa, and Nebraska) have dropped between 3,300 and 6,000 jobs.

Here’s what caught our eye, though: The states that have seen the greatest percentage declines in the call center industry have the strongest economies in the U.S. North Dakota, Nebraska, South Dakota, and Iowa have the lowest unemployment rates in the country, and each has much smaller call center sectors than they had 10 years ago. The only exception is Utah, which has ranks fifth in unemployment (4.9%) and has expanded its number of call center jobs by 14%.

The following map shows total call center job change from 2002-2012 in every state. The table below it gives a state-by-state call center industry breakdown, coupled with overall unemployment numbers for every state.

State2002 Call Center Jobs2012 Call Center JobsChange% Change2013 Average Earnings2002 Concentration2012 ConcentrationOverall Unemployment RateUnemployment Rank
Utah (UT)12,93114,7511,82014%$31,702 4.213.564.95
Nebraska (NE)10,1056,730-3,375-33%$34,652 3.822.13.82
West Virginia (WV)7,5185,610-1,908-25%$27,778 3.752.347.023
South Dakota (SD)3,5532,514-1,039-29%$28,690 3.151.764.34
Iowa (IA)12,6458,523-4,122-33%$31,115 3.021.674.95
North Dakota (ND)2,247735-1,512-67%$25,224 2.30.513.31
Oklahoma (OK)9,82111,4381,61716%$39,775 2.242.135.08
Arizona (AZ)13,94520,0506,10544%$32,707 2.132.417.933
Idaho (ID)3,3528,4825,130153%$30,718 1.933.936.215
Colorado (CO)11,59518,8377,24262%$39,306 1.812.377.124
Texas (TX)48,20951,0992,8906%$43,016 1.761.396.418
Oregon (OR)7,94011,0943,15440%$35,835 1.691.938.238
Maine (ME)2,8015,0692,26881%$38,455 1.562.467.124
Florida (FL)32,33950,84318,50457%$36,032 1.542.037.532
Kansas (KS)5,8585,86020%$54,428 1.511.265.612
New Mexico (NM)3,3234,4031,08033%$36,726 1.481.596.922
Wyoming (WY)1,00299-903-90%$32,783 1.360.14.95
Kentucky (KY)5,9744,842-1,132-19%$29,501 1.160.788.036
Virginia (VA)11,35410,889-465-4%$35,286 1.110.865.310
Arkansas (AR)3,6147,0483,43495%$33,859 1.081.777.228
Pennsylvania (PA)17,14314,491-2,652-15%$40,841 1.070.777.933
Alabama (AL)5,7607,6341,87433%$31,530 1.071.217.228
Tennessee (TN)7,9758,6186438%$38,797 1.040.947.933
Illinois (IL)17,12911,205-5,924-35%$42,275 1.030.599.550
Wisconsin (WI)7,56211,1123,55047%$30,251 0.971.227.124
Delaware (DE)1,113456-657-59%$45,764 0.960.337.330
Nevada (NV)2,8005,8953,095111%$34,604 0.951.579.751
Missouri (MO)7,06012,7405,68080%$44,273 0.911.416.721
New Jersey (NJ)9,6037,011-2,592-27%$76,499 0.870.559.045
Rhode Island (RI)1,177466-711-60%$43,296 0.860.39.146
Ohio (OH)12,02820,2998,27169%$29,714 0.781.27.124
South Carolina (SC)4,0076,2652,25856%$30,662 0.7618.440
Montana (MT)9062,7171,811200%$28,606 0.751.765.612
Louisiana (LA)3,9163,642-274-7%$23,772 0.720.566.215
Indiana (IN)5,4996,8051,30624%$29,010 0.670.728.744
Maryland (MD)4,6162,816-1,800-39%$36,376 0.640.326.620
Minnesota (MN)4,4204,7573378%$32,515 0.580.535.411
North Carolina (NC)6,29612,2255,92994%$26,853 0.560.899.247
New Hampshire (NH)969962-7-1%$36,235 0.540.455.714
Connecticut (CT)2,5052,556512%$63,697 0.520.468.036
Washington (WA)3,9187,5843,66694%$33,961 0.490.757.330
New York (NY)10,78614,5333,74735%$35,110 0.450.58.238
Georgia (GA)5,1079,4994,39286%$28,449 0.450.718.440
Mississippi (MS)1,2611,79753643%$23,979 0.380.479.448
California (CA)15,83817,4081,57010%$52,643 0.360.339.448
Michigan (MI)4,3837,2602,87766%$39,559 0.350.558.542
Massachusetts (MA)2,8142,044-770-27%$39,209 0.30.186.418
Vermont (VT)21542120696%$39,855 0.240.394.13
District of Columbia (DC)2513388735%$37,113 0.130.148.542
Hawaii (HI)1842435932%$18,349 0.10.115.19
Alaska (AK)3121-10-32%$26,590 0.030.026.215
Source: QCEW Employees, Non-QCEW Employees & Self-Employed - EMSI 2013.2 Class of Worker & BLS, Local Area Unemployment Statistics (Preliminary March Numbers)

As NPR’s StateImpact Idaho illustrated last week with EMSI data, Idaho has four times the national average of call center jobs — the most per capita in the nation. It also has the largest share of minimum-wage workers in the United States. Those two facts aren’t necessarily related, but they do point to the proliferation of low-wage jobs in Idaho, a trend documented in great detail in StateImpact Idaho’s excellent Bottom Rung series.

Whenever Idaho or any other state adds a call center, it’s usually welcome news to local economic development officials, and for good reason. It’s not easy to attract jobs, even ones with relatively meager wages. Yet it seems obvious that the run-of-the-mill call center shouldn’t be the cornerstone for any economic development organization’s strategy. Consider EMSI’s jobs multiplier for telemarketing bureaus: In Texas, where average earnings ($43,000) are well above the national average, it’s 1.96, meaning every new call center job yields another .96 jobs. And in low-wage Idaho, the multiplier is a scant 1.53.

And to be clear, the earnings potential at call centers is limited. The industry accounts for an estimated 450,000 jobs in the United States, and those jobs pay on average just $37,519 per year. The two major occupations in call centers are customer services representatives (which accounts for 41% of the industry) and telemarketers (28%). Median earnings for customer service reps are $14.90 per hour, and the top 10% of CSRs make $23.85 — which equates to less than $50,000 per year for full-time workers.

Telemarketers make even less. Their median earnings are $11.10 per hour, and at the top level, they earn $18.98 ($39,478 per year for full-time workers).

We should note: Many of these workers are part-time students and others not looking for careers in the telemarketing field, and some use their telemarketing experience as a jumping-off point for sales or more lucrative customer service positions. Further, some call centers that pop up require technically minded workers, and thus pay more than the figures we’ve mentioned.

The EMSI data shown in this post comes from Analyst, our web-based labor market data and analysis tool. For more information on EMSI, contact Josh Wright ([email protected])Follow us on Twitter @DesktopEcon.

Joshua Wright

[email protected]

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