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Now, Washington state may prohibit outsourcing

Washington may be next in line to see legislation that prohibits contracts to non-citizens.

business Updated: Dec 18, 2003 11:21 IST

The northwestern American state of Washington, headquarters of Microsoft, may be next in line to see legislation that prohibits contracts to non-citizens.

This will come close on the heels of a failed bid by Indiana state Senator Jeff Drodza to sponsor a bill forbidding state contracts from going to foreign companies.

Several states in the country such as New Jersey, North Carolina and Michigan have over the last year of the outsourcing scare introduced similar bills that try to bar use of foreign companies for providing services to state governments.

Now Washington state Rep Zack Hudgins is reportedly considering sponsoring a bill to prohibit the use of foreign labour on state services contracts.

This even as the Wall Street Journal in an opinion piece has said the US needs to get its act together to improve education and training rather than ranting against outsourcing and resorting to protectionism at home.

Tata America, a subsidiary of Tata Consultancy Services, lost its $15.2 million contract this November when Indiana Senator Drodza demanded it be withdrawn on the ground that it was costing citizens jobs.

But his bid to get this move legalised failed when Senators rejected bill 0004 that he sponsored.

Rep Hudgins embodies every software technicians' woes these days in America. A former Microsoft and employee who was unable to find employment over the summer, he signifies every IT engineer's nightmare.

His bill was recommended by the labour group Washington Alliance of Technology Workers, or WashTech, which listed several state software projects that it claims are being performed by foreign workers.

"You have state departments that are letting out contracts that are flowing to offshore vendors and the work is being done in India," WashTech organiser Marcus Courtney told Seattle Times. "That's displacing not only Washington jobs but US jobs."

Washtech claims that one of the state projects totalling $3 million had been farmed out to a Texas company as well as to Satyam Computer Services and another $25 million job that had gone to IBM would definitely use some foreign workers.

The Wall Street Journal, however, says while the threat to US jobs from lower labour costs in India is real, protectionism could prove worse and would anyway fail to prevent US companies from off-shoring.

"Ultimately such gestures can do little to stem the off-shoring tide," says the Journal in its Review & Outlook section. Politicians can take the easy way out and use public anger to their political advantage, or they could do something to change the real causes, the Journal maintains.

"They can focus on the real challenge, which is improving education standards so that the work force is prepared for greater global competition."

First Published: Dec 18, 2003 11:21 IST