WSJ: Business Coalition Battles Outsourcing Backlash
- View SourceBusiness Coalition Battles Outsourcing Backlash Big Lobbyists,
Companies Aim at a Blizzard of Bills Meant to Keep Jobs at Home
By MICHAEL SCHROEDER
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- With overseas outsourcing a hot U.S. election-year
issue, big business is quietly mounting an offensive against state and
federal efforts to keep jobs at home and otherwise restrain
Some of the best-financed trade groups in the U.S. have formed a
coalition to beat back federal legislation that would restrict foreign
outsourcing by government contractors and limit visas for non-American
workers with technology skills.
Calling itself the Coalition for Economic Growth and American Jobs,
the new entity comprises about 200 trade groups -- including the U.S.
Chamber of Commerce, the Business Roundtable, the American Bankers
Association, the National Association of Manufacturers and the
Information Technology Association of America -- as well as individual
CAST YOUR VOTE
Question of the Day: Will the outsourcing of jobs overseas help or
hurt the U.S. economy over the long term?
While U.S. manufacturing jobs have been going abroad for decades, the
more recent and highly publicized outflow of white-collar jobs -- from
call centers to software engineering -- is causing anxiety among
skilled white-collar workers at a time when the growing U.S. economy
hasn't produced many new jobs. (Globalization has fostered one new
value-added U.S. job, in the field of logistics; see related article.)
"Money and energy could be better spent to keep jobs at home rather
than to try to convince people that there isn't a problem," said Thea
Lee, assistant director of the AFL-CIO's international economics
Dozens of bills to protect U.S. jobs have been introduced in state
legislatures and in Congress. Business is alarmed by a provision in
the federal government's omnibus fiscal 2004 spending bill that bars
companies that bid for certain work done by government employees from
moving work offshore, said William Sweeney, vice president of global
government affairs at Electronic Data Systems Corp. EDS, of Plano,
Texas, does government outsourcing work.
One target of the coalition's lobbying is a bill that would require
workers at telephone call centers to disclose their physical locations
at the beginning of each call. The bill was introduced by Senate
Minority Leader Tom Daschle, a South Dakota Democrat, and is backed by
Democratic presidential contender Sen. John Kerry of Massachusetts.
The coalition also is working against a half-dozen bills that would
restrict companies from bringing foreign workers to the U.S. on guest
visas to do jobs previously done by Americans. With layoffs among tech
workers rising, some U.S. workers and labor unions say the widespread
use of so-called H1-B visas for skilled workers is exacerbating U.S.
job woes and undermining wages.
Stopping state initiatives is a major goal of the coalition. Because
this is an election year and because any state legislator can propose
a bill, there has been an unusually rich crop in a relatively short
time. About 80 bills aimed at keeping jobs in the U.S. by limiting
international outsourcing have been introduced in about 30 states. Of
the few that have come up for a vote, none has passed. Bills in six
states have been tabled or voted down. Bruce Josten, an executive vice
president of the U.S. Chamber of Commerce, says the coalition was
instrumental in fending off bills in New Mexico and Virginia.
The coalition says the outsourcing bills create unintended
consequences for state governments that have international programs
and fail to acknowledge the money-saving benefits of work done outside
the country. In addition, the group says blocking non-U.S. operations
from working on state contracts violates World Trade Organization
During the past two weeks, coalition representatives from banking,
insurance and high-tech trade groups attended hearings of Maryland
state legislators to oppose a pending outsourcing bill. Three labor
unions argued for the bill at the sessions.
The coalition relies on staff designated by major trade groups. The
American Bankers Association, for instance, has assigned staffer Scott
Nishioki, former deputy chief of staff for U.S. Transportation
Secretary Norman Mineta, to coordinate lobbying efforts by state
banking groups. "The ABA is very effective at the grass-roots level
because every state has a banking association," said Ed Yingling, the
group's executive vice president.
The coalition is preparing a public-education campaign. While it
hasn't hired a national public-relations firm and has no plans for a
newspaper or television advertising campaign, it doesn't rule out the
idea in the future.
"It's hard to get the message out there when unemployment isn't coming
down as quickly as we'd like and politicians are using it as an
election-year issue," said Harris Miller, president of the Information
Technology Association of America, an Arlington, Va., trade group
representing 500 technology concerns.
Another part of the coalition's strategy is to use concern about
outsourcing to press Congress for more government aid for science and
technical education, research and development, and retraining of
workers who have lost their jobs. Members of one coalition task force
are seeking sponsors for a federal bill that would provide tax
incentives for companies to offer employees continuing education, said
Bruce Hahn, director of U.S. public policy at the Computing Technology
Industry Association, which has 19,000 members in 89 countries.
Write to Michael Schroeder at mike.schroeder@...
Updated March 1, 2004 7:52 a.m.