Proposed Michigan bill to ban outsourcing contracts

Tuesday, 12 August 2003, 19:30 IST
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WASHINGTON: Yet another state lawmaker in the U.S. has introduced a bill aimed at preventing outsourcing of tech jobs to India and other foreign countries. Michigan lawmaker, Representative Steve Bieda, has introduced a bill aimed at curbing the stream of white-collar jobs leaving the state and heading overseas. "A great number of highly educated, skilled Michigan workers have lost their jobs because their jobs were outsourced to places overseas," said Steve Bieda, a Democrat of Warren, Sterling Heights. "We need to work to keep jobs in Michigan." If passed, the law would ban the state government from awarding contracts to companies and businesses that use workers in foreign countries, such as Covansys and Farmington Hills, a Michigan-based information technology company. The company derives 30 percent of its sales from the public sector. It also has 1,900 of its 4,800 employees in India. Bieda's proposed law comes at a time when a growing number of companies are moving work to countries like India, Russia, China and the Philippines to take advantage of lower labour costs. "I understand that the bill is limited in scope because it only deals with state contracts," Bieda said. "But we have to make sure that scarce state dollars are invested at home and in jobs here." Other states including Connecticut, Maryland, Missouri, New Jersey and Wisconsin are considering similar legislation. The move is drawing a mixed reaction. Martin Clague, CEO of Covansys, reportedly said such restrictive legislation was a mark of short sightedness, and hoped it would never see the light of the day. He was supported by Harris Miller, president of the IT Association of America, (ITAA) the Arlington, Virginia-based technology industry trade group. Miller said it would be a huge error if the U.S. became a restrictive society and sets up trade barriers. It would set off a chain reaction and other nations would follow similar protectionist policies. "We can't afford to get into a trade war with these countries" he told reporters here. But a Seattle-based labour union, Washington Alliance of Technology Workers, that's becoming increasingly involved in national technology industry issues felt that there was an urgent need for such legislation. Marcus Courtney, president of Washington Alliance, said legislation was needed to protect American jobs. "This is a trend that companies want to keep secret." Donald Grimes, senior researcher at the University of Michigan's Institute of Labour and Industrial Relations, said the legislation may mean governments will have to pay more for IT services.
Source: IANS
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