There’s a lot money to be made providing aid to needy people. And where there’s money to be
madeextracted, there will be an investment bank, in this case JPMorgan:
In these hard times, some 43 million American families rely on food stamps. To the surprise of many, JPMorgan Chase is the largest processor of food stamp benefits in the United States. The bank is contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia.
The firm is paid per customer. This means that when the number of food stamp recipients goes up, so do JPMorgan profits. Talk about perverse incentives.
Michael Synder at Seeking Alpha asks a very good question about those “perverse incentives” (italics mine):
So what happens if you have a problem with your food stamp debit card?
Well, you call up a JP Morgan service center. When you do this, there is a very good chance that you are going to be helped by a JP Morgan call center employee in India.
That’s right – it turns out that JP Morgan is saving money by “outsourcing” food stamp customer service calls to India….
JP Morgan is the only one today still operating public-assistance call centers overseas. The company refused to say which states had calls routed to India and which ones had calls stay domestically. That decision, the company said, was often left up to the individual states.
JP Morgan has been moving some of these call center jobs back inside the United States due to political pressure, but this whole situation is a really good example of what the “global economy” is doing to middle class Americans.
Just try to imagine the irony – a formerly middle class American that has lost a job to outsourcing calls up to get help with food stamp benefits only to be answered by a call center employee in India.
Isn’t rent extraction from the needy grand?