Protectionism hits the outsourcing industry

BANGALORE, India -- Outsourcing of IT services and back-end business processes to low-cost countries like India, the Philippines, and Ghana is seen as a big money-saver in corporate boardrooms in the U.S. and Europe. But laid-off workers hit by recession look at it differently: Offshore outsourcing is moving jobs outside their countries, and they are pushing policy-makers to put on the brakes.

Government officials in the U.S. and Europe are awakening to the plight of laid-off tech workers and are considering proposals that would curb the growth of offshore outsourcing. Even if current proposed sanctions against offshore outsourcing do not end up being passed into law, the resulting controversy may force changes in the way outsourcing is done.

"Increasing off-shoring of tech jobs means few jobs created in the U.S., increased job insecurity, lower wages and benefits," said Marcus Courtney, president and organizer of the Washington Alliance of Technology Workers (WashTech) in Seattle. "It always amazes me how people say outsourcing is irreversible and inevitable."

The cries of workers threatened by offshore outsourcing have touched a chord among officials in several states, including New Jersey, Maryland, Washington, and Pennsylvania, which are considering or have already proposed legislation that would restrict offshore outsourcing for government contracts, according to the National Conference of State Legislatures, a bipartisan U.S. association that tracks legislation at the state level.

State Senator Shirley Turner, a New Jersey Democrat, proposed a bill requiring that workers on state contracts be U.S. citizens or legal aliens or have some specialty for which U.S. workers cannot be found.

"We need to focus on making sure our own people have work," Turner said.

No U.S. state bill has yet made it through both legislative chambers and gone to a governor for signing into law, but Turner's bill has stirred tremendous controversy and was passed unanimously by the state senate in December last year. It is now being reviewed by the government committee in the state assembly.

In France, a group called MUNCI (Mouvement pour une Union Nationale des Consultants en Informatique or Movement for a National Union of IT Consultants) in Issy-les-Moulineaux is also lobbying for restrictions on offshore outsourcing of IT work.