State jobs don't belong abroad

State jobs don't belong abroad
Lou Dobbs
Originally published on November 2, 2003

Every American should be outraged by the massive outsourcing of U.S. jobs overseas.

This new trend is not about efficiency, higher productivity or skill level, but about selling out American jobs to cheap foreign labor. A new study from the University of California-Berkeley reports that as many as 14 million U.S. service jobs are at risk of being shipped overseas.

But it's not just corporations. Many state and local governments are following the pathetic example set by corporate America. And the trend is expected to worsen.

A recent study by Input Research found that the market for state and local government information technology outsourcing will grow from $10 billion in 2003 to $23 billion in 2008. The problem now, however, is that some state and local governments are not simply outsourcing jobs to contractors that employ American workers. Several government agencies have actually begun to outsource work to firms that utilize cheaper foreign labor.

One of the most mystifying examples is Indiana. The state's Department of Workforce Development is responsible for helping out-of-work Indiana citizens find jobs. Ironically, the department has awarded a $15 million contract to update its computers to the Bombay firm Tata. The project will provide employment to 65 workers coming from India on L-1 visas. The reason given for the move was the millions in tax dollars it will save the taxpayers of Indiana.

This is, of course, the worst kind of shortsighted thinking. New Jersey state Sen. Shirley Turner points out that outsourcing government jobs overseas ultimately results in higher costs to state and local governments and lost income tax revenue.

"If people don't work they don't pay taxes, and if people don't pay taxes we can't provide the services that we're responsible for providing," the Democrat says.

Keeping tax dollars in the U.S. will continue to be crucial as states struggle to repair their finances. The Center on Budget and Policy Priorities found that weak tax revenues will contribute to the state budgetary shortfalls that will persist through at least 2005. According to the study, states will have additional combined annual budgetary gaps of more than $40 billion in 2005, on top of the $78 billion already reported for 2004.

Some state politicians have proposed legislation to stop government from outsourcing jobs to foreign workers and overseas labor markets. Six states have introduced bills that would require work on government contracts be performed by Americans.

Turner, for instance, proposed legislation forbidding the outsourcing of government jobs after the company eFunds, which ran a Green Bay, Wis., call center for New Jersey welfare recipients, moved the center to Bombay.

She told me, "These were jobs that welfare recipients easily could have done themselves. But we were sending the jobs out of the country, rather than employing our own."

Fortunately Turner's action created some tangible results as "eFunds decided they were going to move their call center not just back to this country, but to Camden, N.J., which is one of the poorer cities in our state."

Looking for leadership

Although victories like this are certainly something to cheer, there is little leadership at the federal level. Among the few saying "enough is enough" is Rep. Duncan Hunter (R-Calif.). Hunter spearheaded "Buy American" provisions in the House-passed fiscal 2004 defense-authorization bill. The provisions were to boost the domestic content requirement in military hardware from 50% to 65%. A new compromise proposal will give priority to U.S. suppliers. A good beginning.

We must stop or at least constrain the trends toward outsourcing American jobs to cheap foreign labor. The American dream for our workers is too high a price for global competitiveness.