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States battle overseas job drain

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Published Saturday, February 7th, 2004

CHARLOTTE, N.C. (AP) - Lawmakers in at least 15 states, including South Carolina, are proposing legislation to stem the loss of white-collar jobs to lower-wage countries, The Charlotte Observer reported Saturday.

States have proposed legislation ranging from a total ban on state agencies sending work abroad to banning call centers on state contracts.

In South Carolina, House Speaker David Wilkins introduced a bill last month that included banning state agencies from using foreign call centers. That came after an earlier report by the newspaper that nearly two-thirds of the largest companies headquartered in the Carolinas - 17 of 27 - say they have sent computer tasks abroad, mostly to India.

Wilkins' bill is similar to pending legislation in North Carolina. For several weeks, the bill's author, Sen. Eric Reeves, D-Wake, has fielded calls from legislators crafting anti-outsourcing bills. No state has enacted such a measure.

Last month, the federal government joined the battle with a limited, temporary foreign-outsourcing ban tucked into its current spending plan. The federal move applies only to companies bidding to privatize federal government operations and expires Sept. 30.

The ban could fuel backlash against the cost-cutting trend that critics fear is gutting the U.S. economy.

"Once the federal government sends the signal that it is all right to begin regulating ... whether work can be done overseas, that gives the green light to all states that this is a legitimate public policy issue that needs to be addressed," said Marcus Courtney, who heads a national effort to unionize white-collar workers.

States' food-stamp help desks are the most widespread government use of foreign outsourcing. In some states, welfare recipients also rely on overseas call centers. A few states have had software developed abroad.

Programmers in India last year helped revamp the South Carolina unemployment tax system.

"This is state taxpayer dollars going overseas versus going to the pocketbooks of South Carolina residents," said Wilkins, R-Greenville.

Nearly all the proposals would prohibit state agencies from contracting for nearly any work to be done abroad. South Carolina, like North Carolina last year, has proposed banning only foreign call centers on state contracts.

More aggressive proposals from New York and Colorado would penalize businesses for outsourcing-related job losses.

The Carolinas also are addressing the growing use of foreign call centers by businesses. The proposals would require call center operators to provide their name and geographic location. The Carolinas bills go a step further with a provision that would require written permission from consumers before their personal financial information could be used in a foreign call center.

That provision could be the most onerous for businesses. But so far lobbyists calling about the bill haven't made it an issue, said Rep. Harry Cato, R-Greenville, chairman of the House committee reviewing Wilkins' bill.

The committee likely won't take it up until spring, Cato said. Meanwhile, he plans to study the bill.

"I prefer to keep as many jobs in South Carolina as I can," Cato said. "But I'm always trying to look for that balance."

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