Jewish World Review Nov. 4, 2003 / 9 Mar-Cheshvan, 5764

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Overseas outsourcing is an alarming trend | Every American should be outraged by the trend of massive outsourcing of U.S. jobs overseas. This trend is not about efficiency, higher productivity or skill level, but about selling out American jobs to cheap foreign labor. A study released this week by the University of California, Berkeley, indicated that as many as 14 million U.S. service jobs are at risk of being shipped overseas.

But it's not just corporations. Many state and local governments are now following the pathetic example set by corporate America. And the trend is expected to worsen.

A recent study done by Input Research found that the market for state and local government IT outsourcing will grow from $10 billion in 2003 to $23 billion in 2008. The problem now, however, is that some state and local governments are not simply outsourcing jobs to contractors that employ American workers. Several government agencies have actually begun to outsource work to firms that utilize cheaper foreign labor.

One of the most mystifying examples is the state government of Indiana. The state's Department of Workforce Development is responsible for helping out-of-work Indiana citizens find jobs. Ironically, the department has awarded a $15 million contract to update its computers to the Bombay, India, firm Tata. The project will provide employment to 65 workers coming from India on L-1 visas. The reason given for the move was the millions in tax dollars it will save the taxpayers of Indiana.

This is, of course, the worst kind of shortsighted thinking. New Jersey state Senator Shirley K. Turner notes that the outsourcing of government jobs overseas ultimately results in higher costs to state and local governments and lost income tax revenue.

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"If people don't work, they don't pay taxes," Turner said. "And if people don't pay taxes, we can't provide the services that we're responsible for providing."

Keeping tax dollars in the United States will be crucial as states struggle to repair their finances in the years to come. New research conducted by the Center on Budget and Policy Priorities found that weak tax revenues will contribute to the state budgetary shortfalls that will persist through at least 2005. According to the study, states will have additional combined budgetary gaps of more than $40 billion in 2005, on top of the $78 billion already reported for 2004.

Some state politicians have put forward legislation in an attempt to stop government from outsourcing jobs to foreign workers and overseas labor markets. Six states have introduced bills that would require work on government contracts to be performed by American workers.

Turner, for instance, proposed legislation forbidding the outsourcing of government jobs after the company eFunds, which ran a Green Bay, Wis., call center for New Jersey welfare recipients, packed up and moved the center to India.

"These were jobs that welfare recipients easily could have done themselves," Turner said. "But we were sending the jobs out of the country, rather than employing our own."

Fortunately, Turner's action created some tangible results. "Because of my bill and the firestorm that it created, eFunds decided they were going to move their call center not just back to this country, but to Camden, N.J., which is one of the poorer cities in our state," she said.

And while victories like this are certainly something to cheer, there is little is leadership at the federal level. Among the few saying "enough is enough" is Rep. Duncan Hunter, R-Calif. Hunter spearheaded "Buy American" provisions in the House-passed fiscal 2004 defense-authorization bill. The provisions were to boost the domestic content requirement in military hardware from 50 percent to 65 percent. A new compromise proposal will give priority to U.S. suppliers - a good beginning.

We must stop, or at least constrain, the trend toward outsourcing American jobs to cheap foreign labor. The American dream for our workers is too high a price for global competitiveness.

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Lou Dobbs is the anchor and managing editor of CNN's "Lou Dobbs Moneyline." Comment by clicking here.

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