Gangs of New Jersey

Gangs of New Jersey - Part 8

Date: Tuesday, April 01, 2003 6:46 PM

H-1B and JOB DESTRUCTION NEWSLETTER

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http://www.eweek.com/article2/0,3959,971825,00.asp

March 24, 2003
Outsourcing Debate

When New Jersey State Sen. Shirley Turner was first inspired to propose
legislation banning the outsourcing of IT and other state contracts to
overseas companies, she had no clue that bill No. 1349 would incite
both heated lobbying by technology groups against it and a wildfire of
support from laid-off technology workers. Since its introduction in
March 2002, the bill has generated more response than any other piece
of legislation introduced by the Democrat from Ewing in her nine-year
political career.

But by March 6, 2003, the day the bill was scheduled to be heard by the
New Jersey Legislature's State Government Committee, technology
lobbying groups such as the National Association of Software and
Services Companies, an association of Indian technology companies, were
ready to water it down. They proposed an amendment stating that
outsourcing could occur if the work cost less to do offshore or
promised improved quality offshore.

The lobbyists succeeded in getting the bill tabled. But they didn't
succeed in persuading Turner to give up. Encouraged by an outpouring of
support from IT workers, Turner said she will continue to lobby for the
bill. The senator recently met with eWeek Senior Writer Lisa Vaas to
talk about her rationale.

eWEEK: Why did you propose this bill?

Turner: The work in question was a Department of Human Services
contract for $326,000 a month for seven years ... dealing with
[offshore] call center agents calling recipients regarding their
welfare checks.

You can only be on welfare a given period of time before you have to
get a job. If we're telling people they have to get a job, it's
incumbent on us as legislators to make sure there are jobs out there
for them. We've had around a 6 percent unemployment rate in New Jersey.
We have people looking for work who can't find it. I have no problem if
we outsource jobs because we can't find people to do the work, but
[we're talking about work] that anybody can do.

eWEEK: How do you answer those who say offshore outsourcing makes sense
because of its low costs?

Turner: Some of the people who are supportive of the special-interest
groups are saying we're saving taxpayer money. We're not. ... At the
time [a given offshore company] got the bid, they were paying wages to
people here in this country, at around $8 to $10 an hour. They get the
contract, and then they move the operations to where they're paying $1
to $2 an hour, but we didn't get any rebate on what we're paying them.

It's unfair. Another company could have gotten that contract
themselves. So [the offshore company] probably underbid, knowing what
they were going to do. If you bid the contract here, you win it here,
you should perform it here.

eWEEK: Your interest is in protecting jobs for U.S. IT workers. Does it
then make sense to disqualify companies that employ H-1B and L1 visa
holders from receiving state contracts?

Turner: If the federal government is allowing this to occur, as a state
legislator, I have no control over these workers who are coming in on
these visas. I could not say they're not qualified to work because the
federal government is saying that they are.

eWEEK: How much of a security risk is posed by the act of sending
sensitive consumer or business information overseas?

Turner: When [overseas companies are] dealing with welfare clients,
those clients' whole life history and financial information is
available to the people who are making those phone calls [from overseas
call centers]. From what I've been told by people who've contacted me,
there are situations where they've had phone calls made by credit card
companies that were being made offshore. They were concerned about
[those companies] having financial information available to them. They
thought it was something this government should be concerned about,
what with all the acts of terrorism.

eWEEK: Who's writing to you?

Turner: People who've been laid off because of people coming in on
these special visas. Those people in the computer area who've been laid
off because their jobs were outsourced to foreign countries China,
Russia, India, the Philippines.

It's unbelievable. I've never gotten so much e-mail on any one issue. I
had no idea what I was doing when I introduced that bill. It was so
narrow in terms of what I was trying to do. Now some people want it to
be a panacea for other issues associated with this. Others are more
realistic they see it as a step in the right direction.

eWEEK: Isn't this protectionism?

Turner: You're right it is protectionism. I'm protecting jobs in this
country. Our economy is in a recession. We have a deficit, just like
any other state. The reason is, we don't have people working and paying
taxes. And those people are the ones who need the jobs. They have
families to support.

Lowdown on the New Jersey bill

What it is Bill No. 1349,
introduced to the N.J. Senate and General Assembly on March 21, 2002,
is intended to ensure that state funds are used to employ people
residing in the United States and to prevent the loss of jobs to
foreign countries.

Status
The bill was scheduled to be heard in the State Government Committee
March 6, 2003. However, industry lobbyists prevailed upon Chairman Al
Steele, who deferred the bill's hearing until after its sponsor,
Turner, heard arguments put forward by the bill's opponents.

What opponents proposed
An amendment stating that exceptions to the original bill be justified
by cost savings to the state of New Jersey or improved quality of
services.

What's next
Turner said she will continue lobbying to get the bill heard.

Ripple effect
Legislation to study methods of increasing efficiency in the
procurement process, including outsourcing, has been introduced in
Maryland. Connecticut is considering legislation to ensure that
outsourced work doesn't go overseas. Missouri and Wisconsin are
considering similar legislation.

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