State, US lawmakers push to hinder offshore outsourcing

WASHINGTON (12/15/2003) - Federal and state lawmakers are accelerating efforts to stem offshore outsourcing, chiefly by setting restrictions on the use of foreign labor in government contracting.

At the same time, the issue is drawing attention in the presidential race. For instance, Sen. John Kerry (D-Mass.), who's seeking the Democratic nomination, introduced legislation last month requiring call center employees to disclose their location at the commencement of each call. When introducing the legislation, Kerry cited a Gartner Inc. estimate that one in 20 IT jobs at user companies will move offshore by the end of next year.

There are at least nine bills pending in the U.S. Congress aimed at barring foreign workers from government contracts, and four states -- North Carolina, New Jersey, Michigan and Indiana -- are considering similar legislation, according to a study of pending bills assembled by Stuart Anderson, executive director of the recently formed National Foundation for American Policy in Arlington, Va. Anderson, a former Senate staffer on the Immigration Subcommittee, called the growing number of bills related to offshore outsourcing "creeping protectionism."

But many IT workers who have lost their jobs as a result of offshore outsourcing, such as William Stolting, a former director of technology for a major financial services firm in New York, stress that lawmakers need to take action to help people in their position.

One step legislators can take is to ensure that government contract work remains in the U.S., even if it costs taxpayers "an extra dollar," Stolting said. "I think people understand there is cost involved with being a citizen and protecting what we have here."

In a Capitol Hill forum on offshore outsourcing Thursday, Rolf Lundberg, a senior vice president at the U.S. Chamber of Commerce, said legislation that seeks to impede offshore outsourcing "will undermine efforts to open new markets overseas" and invite "some form of response and retaliation" by foreign nations.

Lundberg and representatives of other trade groups argue the U.S. job protectionism prevents companies from investing in new areas and ultimately hurts innovation and job growth.

New activists

But those arguments won't stop the efforts of workers who have lost their jobs. IT activists such as James Pace, legislative director for the Rescue American Jobs Foundation in Mesa, Ariz., said IT professionals are beginning to get involved with groups representing blue-collar workers. "We are trying to make this as big an issue as we can," he said.

In addition to setting restrictions on call centers, some bills seek to make it mandatory for government contracts to be awarded only to U.S. citizens, and others aim to set limits on the use of visas such as the L-1, which is used by companies to transfer employees from other countries into the U.S.

Among the supporters of those efforts is Bob Baugh, executive director of the AFL-CIO Industrial Union Council. "Anything in the digital age that can be moved . . . will be moved," he said.

Erica Groshen, an assistant vice president at the Federal Reserve Bank of New York, said the U.S. is in a recovery with respect to output, "but we're not in a recovery in terms of jobs."

Still, Groshen said she doesn't consider the movement of jobs overseas to be negative for the U.S. economy, because the country's competitive advantage is its ability to innovate. "Constantly shipping jobs abroad signals our success as innovators," she said.

Robert Atkinson, senior vice president of the Progressive Policy Institute in Washington, said there are policy changes the government can make to help the IT industry. He cited examples such as investing in IT projects, boosting training and giving affected workers the tools they need to adjust to the new environment, including assistance with medical coverage and expanded unemployment insurance.

Jeff Lande, a vice president of the Information Technology Association of America, an industry trade group in Arlington, Va., said there are limits to what can be outsourced. For instance, eight out of 10 IT workers are employed by small companies that don't have the scale or capacity to send work offshore, he said.

More than 500,000 jobs, by some estimates, have been moved to India. But Lande said improvements in the standards of living in other countries enable their consumers can buy more products.

"This is a battle that's going to be won on innovation and quality," Lande said.

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