Anti-offshoring legislation heats up

Bills attempting to stymie the outsourcing of American jobs were introduced this year in nearly all 50 states, as well as in the U.S. Congress, and there is no indication that the legislative trend will stop.

Of the bills that have actually become laws, most seem to lack teeth and in some cases have had negative consequences by costing states millions of dollars more to pay for contracts with call centers in the United States rather than in other countries. But lobbying efforts to pass stronger legislation appear to be intensifying.

"I think on the state level, these efforts will continue," said Stuart Anderson, executive director at the National Foundation for American Policy (NFAP). 

Forrester Research forecasts that the number of outsourced U.S. jobs will reach 3.3 million by 2015, which translates to about 250,000 layoffs annually, according to Lael Brainard and Robert E. Litan, of the Brookings Institution.

NFAP's Anderson expects to see continued efforts by lawmakers at the federal level to curb offshoring and outsourcing by introducing amendments to pending legislation. Last year, for example, two amendments that would have restricted the outsourcing of federal government work and the use of federal funds in states that permit offshoring were passed by the U.S. Senate, but they ultimately were dropped by conference committees that met to hash out differences between Senate and House versions of the bills.

The amendment of bills is a political tactic: By tacking what is in effect different legislation onto, say, a budget bill, lawmakers can force the hands of colleagues who might not want to be seen as voting against the legislation, even though they may not approve of the amendment. Anderson expects that legislators will turn to data privacy and identity theft issues in attempts to stem the export of call center and other jobs.

"I think it really only takes one state to pass a bill -- for example, on limiting data being sent overseas -- to completely interfere with a whole range of industries that rely on being able to send data across a border," Anderson said.

In cases where state legislation has been approved and has taken effect, negative consequences have sometimes occurred. For example, a New Jersey measure to stop Indian workers from performing unemployment call center services created 12 jobs in the state but wound up costing $900,000 more than offshoring the center, Anderson said.

According to the NFAP, more than 112 bills have been introduced in at least 40 states in the first quarter of the year. Numerous states have pending legislation that would simply set up commissions to study the effects of offshoring.

Added to the mix is a steadily rising analyst outcry that "the promised benefits of offshoring are far overstated, while the likely economic costs are not addressed at all," according to a briefing paper by L. Josh Bivens, of the Economic Policy Institute.

Assessing statistics is difficult, policy analysts both for and against offshoring note, because many companies don't say what effect offshoring has on layoffs or provide a full picture of which jobs are being handled outside of the United States. Lawmakers, however, will undoubtedly continue to introduce legislation but avoid what analysts see as the real issues -- getting a grasp on the overall impact of offshoring by improving data collection and analysis, the need to boost U.S. educational and retraining programs, and emphasis on helping employees who lose their jobs.