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WSJ: Business Coalition Battles Outsourcing Backlash

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    Business Coalition Battles Outsourcing Backlash Big Lobbyists, Companies Aim at a Blizzard of Bills Meant to Keep Jobs at Home By MICHAEL SCHROEDER Staff
    Message 1 of 1 , Mar 1, 2004
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      Business 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
      globalization.

      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
      companies.

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      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
      department.

      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
      agreements.

      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.
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