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50 US legislators for anti-outsourcing bill

Fifty members of the House of Representatives said they were to introduce a bill to deny US firms Federal help if they shifted jobs.

india Updated: Mar 05, 2004 02:50 IST
Press Trust of India
Press Trust of India

Fifty members of the US House of Representatives have announced that they are introducing a bill that would deny American companies Federal financing and loan guarantees if they shift the jobs overseas.

'The Defending American Jobs Act' was written by Congressman Bernard Sanders, the only independent member in the House. It will be cosponsored by about 50 other representatives, including Republican Ron Paul of Texas and Virgil Goode of Virginia.

Democratic candidate for the Presidency Senator John Kerry has gone to the extent of calling CEOs of companies outsourcing "Benedict Arnolds," i.E traitors to the United States like the general in the Revolutionary War againt the British who defected to the British.

Senate Democrats, including Senator Christopher Dodd, have introduced similar legislation in the Senate.

According to an ABC-TV poll, 57 per cent of Americans polled think President George W Bush does not understand the problems of ordinary Americans, with overwhelming majorities disapproving of the way the President has been handling both the economy and job creation.

Former Vermont Governor Howard Dean, unsuccessful candidate for the President who has so far won only his State in the primaries, told ABC-News: "I think the Bush administration is completely out of touch with the lives of ordinary Americans.

"A half-trillion dollar debt (this year's anticipated budget deficit) is going to have to be paid at some point by somebody sooner or later and it is the very people whose jobs the President is sending offshore."

Analysts noted that it is not President Bush who is sending jobs offshore but companies who think that is the only way to stay competitive and save jobs at home, but in this emotional political atmosphere, logic is at a discount.

Senate Democrats' legislation demands US companies planning an outsourcing explain why they intend to do so. Kerry wants call centre operators in India and elsewhere to announce where they are speaking from while answering queries.

ABC-TV said some American analysts opposed to outsourcing fear the phenomenon: may gut the American middle class. Forrester Research, it notes, estimates that 3.3 million Amrican white collar jobs will leave the U.S. By 2015.

Two University of California-Berkeley economists, Ashok Bardhan and Cynthia Kroll, say approximately 14 million American service jobs may be vulnerable to outsourcing in the long run, more than 10 percent of all US white collar jobs.

At a recent House hearing, opponents of outsourcing produced an Indian-American lady, opposed to out sourcing. She complained her job was taken away by the phenomenon.

President Bush's Chief Economic Adviser, Gregory Mankiw "sounded almost nonchaltan," ABC noted, arguing that there is little difference between export and import of manufactured goods and service jobs.

He said at a press conference recently that the US enjoys a huge surplus in the service industry as opposed to a huge deficit in the export and import of manufactured goods.

Americans say when they talk to an operator in India outsourced by a US company, the employee fails to give the real name though they do not explain how it hurts them.

One of them told ABC-TV that on Thursday, a call to Delta Airlines Promotions 800-number was connected to employees working in Bangladore, India.

"We do have a lot of agents over here," one employee said. They said their names were "Brian," "Ron," and "Shirley" who later revealed that her real first name was Shanti. A representative named "Ben" said he uses that name because he was told to do so while servicing Americans.

Warren Gunnels, Sanders' legislative aide, said the House bill is the first rational attempt to deal with the issue of "offshoring," or sending US manufacturing and service jobs to lower-cost venues abroad. ("offshoring" is usually used for investing capital abroad for manufacturing jobs but sometimes it is used interchangeably with offshoring of jobs).

Sanders singled out Motorola Inc. For receiving a 190 million dollars loan from Ex-Im Bank (Ex-Im Bank loans are available to any company willing to buy American goods and services) and using that to build its China operation, while firing 42,900 workers in the U.S., and General Electric Co. for receiving 2.5 billion dollars to finance China expansion while firing 260,000 U.S. Workers.

He did not say when the layoffs took place or when the Ex-Im Bank loans were made and how many jobs were saved or created in the U.S. By these companies thanks to offshoring and outsourcing.

A GE spokesman said the company's U.S. Employment has remained steady around 160,000 for the past decade and added that exports of products like jet engines and turbines have kept American workers employed. More

A Motorola spokesman said the company employs about 88,000 workers worldwide and derived about 45 percent of its sales outside the country.

Ex-Im Bank spokesman Phil Cogan said the Bank has never financed foreign expansion by Motorola, GE or any other company. "We finance exports, not foreign expansion by U.S. companies," Cogan said. However, logic and reason are at a discount among at least some of the opponents of outsourcing.

The House bill sponsored by 50 members would require an Ex-Im Bank loan applicant to specify the number of employees in the US and abroad as welL as a general wage scale. If the number of non-US workers increases while US workers' numbers fall, the loan would be cancelled.

"If the companies don't create jobs in US, we don't believe the Ex-Im Bank should be in existence," Gunnels said.

Lawmakers in about 20 states have already proposed laws banning State contracts from being awarded to non-US companies. In January, Bush signed an Omnibus Appropriations Act, which has a provision that bars some government agencies hiring non-US companies on their contracts.

However, Bush had no choice. There as no way he could excise one part of a bill without gutting the entire bill on which the functioning of the US Government depended.

The American Electronics Association reports that US technology employment fell four per cent last year to below six million, the lowest since 1999.

Critics attribute a part of the loss to outsourcing to lower cost centres abroad, especially India. But supporters of outsourcing say it probably saved more jobs in US by enabling companies to survive competition at home and abroad.

First Published: Mar 05, 2004 00:56 IST