June 2004

Online Exclusive To Publisher's Outlook:

Offshoring Concerns: State and Federal Legislation

BY NADJI TEHRANI

The purpose of this sidebar is to inform our valued readers about the national debate on offshoring as well as American Protectionism, which is manifested by some 63 state and federal bills, as well as other concerns.

As a prerequisite, I urge you to read my Publisher's Outlook entitled, 'Offshore Outsourcing In Perspective, The Good, The Bad and the Ugly' in the August 2003 issue of CIS (www.tmcnet.com/cis/0803/0803puboutlook.htm).

Concerns:

The following concerns have come to our attention regarding offshore outsourcing.

1.  The perception that offshore outsourcing has put millions of Americans out of work.  For example, at the time of writing this editorial, 100,000 SBC Communications employees are on strike'the issues: outsourcing and medical benefits. 

Tameka Wilson, an SBC employee who was outside the company's downtown Detroit offices on Friday, said she worried about her billing job being outsourced.  'I believe anything is possible if they can move technical jobs to India,' Wilson said.

Source:  CNBC online, May 21, 2004.

2.  Major geopolitical concerns. This issue is significant as shown by the following excerpts from CNN Money on the Web:

'     'Bombay, India (Reuters) ' Indian stocks plunged as much as 17.5 percent Monday in their biggest one-day fall ever as it became clear that a new leftist-backed government could be unstable and slow the pace of economic reform.'

'     'The stock market crash wiped out as much as $40 billion in investor wealth.'

'     'There is absolute chaos and my retail clients have lost heavily.  People are talking about foreign funds looking to pull out $1 to $2 billion from India.'

American Protectionism And Legislation To Limit Offshore Outsourcing

Editors Note:  On the topic of offshoring, the following are excerpts from a presentation made at the Global Call Center Outsourcing Summit' in May 2004 by Mr. Michael Faulkner, CAE Senior Vice President, Direct Marketing Associations segments and affiliates:

The Two Sides of the Offshore Issue

Against Offshoring

• Two-Thirds of Americans                                 

• Lou Dobbs & Pat Buchanan                            

• Political Opportunist                                                

• Unions & Some Trade                                                                       Associations   

• Protectionists and Ultra                                  

• Conservative Nationalists

• Anti- Immigration cohorts

• France and Germany

• Anti- (you name it)

In Favor of Offshoring

• Developing Nations

• Global Marketing and   Multinational Firms

• True Capitalists

• WTO

• Some Trade Associations

Perception #1: The U.S. Is Losing Jobs And The Jobless Recovery Is Proof Of This.

Political Response Is Predictable:

• Four Senate Bills proposed.

• Three House Bills proposed.

• States more aggressive.

State and Federal Legislative Update: Offshore Outsourcing

The sheer number of legislative initiatives and intensity of debate are indications that the concerns have to be addressed.

Proposed Federal Legislations

Legend:

D - Democrat

R - Republican

H - U.S. House of Representatives

S - U.S. Senate

U.S. House Bills

H 3818 Call Center Employees ' Strickland (D)

• Would require disclosure of physical location of employee.

• February ' House Committee on Energy and Commerce

H 3878 To Establish The Commission On American Jobs ' Waters (D)

• Would establish a commission on American jobs.

• March ' House Committee on Education and the Workforce

H 3888 Business Federal Assistance  - Sanders (I)

• Would prohibit business from laying off a greater percentage of U.S. based workers than workers in other countries or forfeit any federal assistance.

• March - House Committee on Government Reform

U.S Senate Bills

S 1673 World Trade Organization - Grassley (R)

• Would amend WTO rulings on the Foreign Trade Sales Corporation/Extraterritorial Income Exclusion benefit in a manner that would preserve U.S. jobs.

• April - In Senate, amended on Senate Floor and passed.

• No House action to date.

S 1873 Physical Location Disclosure of Center Staff  - Kerry (D)

• Would require disclosure of physical location of employee.

• November 2003 - Senate Committee on Commerce, Science, & Transporation

S 2090 Worker Adjustment and Retraining Act - Daschle (D)

• Amends to act to provide for employees relating to offshore outsourcing of jobs.

• February - Senate Committee on Health, Education, Labor and Pensions.

S 2235 Department of Commerce Renaming - Hollings (D)

• Would rename the Department of Commerce the Department of Trade and Commerce and transfer the Office of the U.S. Trade Representative to that department, to consolidate and enhance statutory authority to protect American jobs from unfair international competition.

• March - Senate Committee on Finance.

Here are some other concerns about offshore outsourcing to a few of the most common offshoring countries:

• This is an election year in the U.S. and jobs are a number one concern.

• Dozens of federal, state and local legislation against offshore outsourcing are expected to pass in the near future.

• Cultural and language problems exist in some countries.

• Infrastructure, blackout problems persist.

• High turn-over.

• Lack of experience and poor training.

• Poor quality.

• Hidden costs.

• Night shifts, high stress levels.

• High pressure to produce creates failure and very poor morale.

• Database security issues.

• Database confidentiality issues.

• Prevalent terrorist attacks and anti-American sentiments.

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Editor's note: To get the complete picture, we strongly urge you to read the Publisher's Outlook as well as other related articles written in the last twelve issues of Customer Inter@ction Solutions magazine.

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