Food Stamps Create Jobs… in India

"We have no complaints with the call center. We get very good service," he said. "I was born and raised in Pittsburgh. There's sometimes a communication issue between somebody from Pittsburg and somebody from Harrisburg, Pa."

The state's contract with JP Morgan expires on Aug. 31. In requests for a new contract, West Virginia has requested a domestic call center because of political concerns.

The 488,000 households in Tennessee also have their calls sent to JP Morgan call centers in India. The state's contract runs through February 2012 and there are currently no plans to change it, according to Michelle Mowery Johnson, director of communications for state's Department of Human Services.

She noted that there are no federal or Tennessee state laws prohibiting the outsourcing call center operations.

Unemployment in West Virginia is now 6.9 percent and 9.6 percent in Tennessee.

Other states struggled to answer questions about their call center locations.

"Who would have ever thought it would be such a difficult question to answer," said Amy Kempe, spokeswoman for the governor's office in Rhode Island. She eventually learned that JP Morgan was sending the state's food stamps calls to India but now keeps them all domestically.

Kempe later told ABC News however that JP Morgan was still routing calls for unemployment benefits to India. Unemployment in Rhode Island now stands at 10.5 percent.

Following a congressional mandate in 1996, states started moving toward electronic delivery of food stamp benefits, now called Electronic Benefit Transfer or EBT.

States Save by Outsourcing

States found it cheaper to outsource these services. By switching to debit cards for food stamps and other benefits, states save millions of dollars in processing and administrative fees.

Companies, including JP Morgan, filled the niche. For a fee, the bank will provide debit cards to benefit recipients. Each month, they will load money onto the cards and on a daily basis process transactions at stores.

For unemployment insurance, the providers also process ATM cash withdrawals.

For instance, in Michigan, JP Morgan allows unemployment recipients two free withdrawals from its network of ATMs. For each addition withdrawal, the bank takes a $1.50 fee. If somebody loses their card, the first replacement is free. The second costs $7.50.

The banks also get a fee for each case they handle.

Take Indiana. JP Morgan gets 62 to 64 cents for each food stamp case handled monthly there. With 296,245 cases right now, that means the state is paying JP Morgan $183,672 a month on top of any other fees it collects.

Indiana eliminated 100 full-time employees when it hired JP Morgan to make the program cost-neutral, according to Marcus Barlow, spokesman for the state's Family and Social Services Administration.

But unlike Florida, Tennessee or West Virginia, Indiana keeps all its calls domestically. In fact, all of its calls go to a call center in Maryville, Ind., Barlow said, because the state required an in-state call center when soliciting bids.

Other states have rebelled against sending jobs overseas.

South Carolina used to have its calls go to a JP Morgan call center in India. But in its latest contract, signed a year and a half ago, it stipulated that the calls stay domestically.

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