High Road:  Outsourcing Legislation is In

You know we're in trouble when new words are needed to describe the problem. The Word Spy defines the new adjective “offshorable” (awf.SHOR.uh.bul) as "Capable of  being performed by a person in another country, especially at a lower wage or salary."

This month, at least 28 states are looking at legislation to prevent offshorable outsourcing.  Several Governors (NC, WA, MN) have approved orders requiring state agencies to identify outsourcing contracts, and a federal bill prohibiting offshoring of federal contracts passed the U.S.  Senate March 4^th by a vote of 70-26.

According to Mary Bottari of Public Citizen, “The goal of such policies is to keep taxpayers dollars working for the community and reflecting the values of the state.”  In Wisconsin, Representative Mark Pocan does just that by introducing the "American Jobs Act", which allows the state to only contract  for services  performed within the U.S.  

In Pennsylvania, a three-bill model outsourcing package was introduced to (1) Require companies to notify the state if they outsource more than 100 jobs to a foreign country (2) Bar such companies from any procurement contract, grant, loan or bonding assistance from either the state or local governments in Pennsylvania for seven years; and (3) Require all state contractors to have an employment eligibility forms on file.  Pennsylvania has lost 70,000 jobs in the last three years as companies have moved operations abroad.

Trailblazers:  Best Anti-Outsourcing Legislation in the States

In Washington State, House Bill 2768 would prohibit contracting with offshore firms for any road construction, corrections projects or work at higher education institutions, and would also apply to subcontractors. For example, steel used to build a bridge in Washington would have to be prefabricated in the United States, said Rep. Zach Hudgins, D-Tukwila, the bill's primary sponsor.  “This is all about starting the discussion around whether we should use tax dollars to create jobs someplace else," said Hudgins.

In Missouri, Public Citizen reports that SB 853 is focused on privacy concerns, prohibiting outsourcing when personal information is involved, including social security, banking or medical information. Recent new reports indicated that hundreds of thousands of U.S. tax returns will be shipped overseas this year by tax preparation companies without the knowledge of the taxpayer.

In Minnesota, a ban on outsourcing advanced with bipartisan support.  The State and Local Government Operations Committee approved S.F. 1792 on a 10-1 vote, and Governor Pawlenty has directed officials at state agencies to examine whether they are outsourcing consulting work.

In Indiana, Anti-Outsourcing Legislation SB 4 passed the state Senate 38-10.  This bill says none (0%) of Indiana state government contracts may be offshored after July 1, 2004, which is the time needed to establish administrative rules.  Until then, no contract may be awarded until interim guidelines are established. (PDF SB4)

In California, 11.5 percent of jobs could eventually be sent overseas, higher than the national average of 11 percent.  More than 28 states are considering legislation to stem such job losses, said Sen. Liz Figueroa.  As many as 13 bills are pending in the Legislature that would regulate the growing practice of sending state services and medical-information processing to cheap labor markets overseas.

In Alabama, Some state leaders say it's the most serious issue facing our country right now. General Electric has more than 17,000 employees in India, Hewlett-Packard, 11,000 and IBM, 6,000.  It's estimated that by the year 2015, one to 5 million U.S. jobs might move overseas.

In Michigan, the state is losing 1,000 jobs a month from outsourcing, and this issue is certain to be one of the hottest topics in the upcoming election.

The US Senate, by a vote of 70 to 26, voted to approve Senator Chris Dodd's amendment, which would prohibit taxpayer dollars from being used to outsource or promote offshore work formerly done in the U.S.

Other states considering anti-outsourcing legislation include Colorado, Connecticut, Florida, Kansas, Maryland, Mississippi, Nebraska, New Jersey, New Mexico, New York, North Carolina, Rhode Island, South Carolina, Tennessee and Utah. 

Low Road:  States Outsourcing Programs for the Poor

When the unemployed or poor residents of Wisconsin, California and North Carolina have a question about food stamps, they call a state toll-free number.  It’s a cruel irony that down-on-their-luck unemployed callers dial a worker in India using a fake American name and a fake American accent while . . . being paid by that state.

In California,  critics are questioning why the state ships overseas the kind of entry-level jobs that could keep welfare recipients here off the dole.  Those operators at call centers in India and Mexico, who work for a company that handles transactions in the state's food stamp program, are trained not to reveal their location.  Fortunately, the state of North Carolina reversed its stance on outsourcing when Governor Mike Easley announced a state-financed food stamp call center would return to the Tar Heel state from India.

Outsourcing News you Can Use

Click here to see a constantly updated list of sources and resources to help journalists cover the outsourcing issue.

NPR Reports that Concerns over lost U.S. jobs and corporate "outsourcing" is prompting lawmakers on Capitol Hill and in state legislatures to propose laws to discourage companies from sending work overseas. But a group of about 200 well-financed trade groups has formed a new coalition to try to keep these bills from ever becoming law.

Business Response:  Cut Outsourcing = Cut Profits.  A simple Google search reveals that investors are very aware these actions threaten profits and stock prices.

AFL-CIO claims it’s outrageous that despite one of the worst job creation records in history, and despite the 9.9 million Americans still out of work in our jobless “recovery,” the Bush administration has blessed sending more jobs overseas in its annual economic report to Congress.

CNN reports that President Bush is backing away from the administration statement: "Now, to get back to the question about outsourcing, I think outsourcing is a growing phenomenon, but it's something that we should realize is probably a plus for the economy in the long run.”

Outsourcing Reports

The UC Berkeley School of Business report on The New Wave of Outsourcing cites a risk of 14 million jobs being outsourced within the next decade.

A Report from Policy Matters Ohio shows that of the 199,000 Ohio manufacturing jobs lost between 1999 and 2003, one in six vanished directly as a result of international trade. In fact, 45,734 Ohio jobs lost between 1995 and October 2003 can be traced to increased imports or relocation of production out of the country.  Interested readers can also check out Policy Matters' 2003 annual report (PDF).

Some economists have claimed that lack of demand on the part of U.S. consumers is to blame for the loss of manufacturing jobs. This week's EPI Snapshot shows that U.S. demand for manufacturing products is in fact on the rise, and explains why increased trade deficits are responsible for the decline of the manufacturing sector.

The Policy Shift to Good Jobs:  Cities, States and Counties Attaching Job Quality Standards to Development Subsidies:  A national survey finds that the number of economic development subsidies with job quality standards is continuing to rise sharply, and that standards are becoming an everyday tool for effectively targeting development subsidies to businesses that create high-quality jobs.

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