States Take Steps on Outsourcing

One of the hottest political topics this year is the outsourcing of U.S. jobs to other countries. A Google search on "outsourcing" returns about 4.8 million pages. Reports from Gartner, Forrester Research, McKinsey & Company, AeA, and the Institute for International Economics, among others, have looked at the topic and fed the interest.

While the presidential campaigns attempt to deal with the issue, in the last week alone, four governor have taken steps to try and address some aspect of the outsourcing issue. As is typical in technology issues, state action defies party label and geography.

Earlier this week, Utah Gov. Olene Walker signed legislation that will provide financial incentives and assistance to state agencies that outsource work to companies in rural Utah. The program will be administered through the Utah Department of Community and Economic Development's Smart Sites program <http://smartsites.utah.gov/>. The legislation can be found at: http://www.le.state.ut.us/~2004/htmdoc/sbillhtm/SB0199S01.htm

In Michigan, Gov. Jennifer Granholm signed Executive Directive 2004-3, which gives preferences to Michigan-based job providers in the state government contracting process. For the first time, the Department of Management and Budget must consider whether or not a bidder is engaged in exporting jobs or in using an offshore tax shelter when determining if a bidder’s proposal provides the best overall value to the state. Under the directive, the department will now collect from all vendors information related to job outsourcing. The directive is available at: http://www.michigan.gov/gov/0,1607,7-168-29544_29546_29549-88892--,00.html

Meanwhile, Massachusetts Gov. Mitt Romney revealed his plan to slow outsourcing by giving economic incentives to companies willing to stay and expand in the state. The governor's $29 million initiative would: 1) provide more than $8 million in capital loans to companies willing to stay or expand in Massachusetts, 2) offer $10 million in grants to firms that create 250 or more in-state jobs, and 3) distribute $11 million in smaller $2,000 grants to companies that hire workers that have been unemployed for over a year. For more information, visit: http://www.mass.gov/portal/govPR.jsp?gov_pr=gov_pr_040322_sencorp_outsourcing.xml

Earlier this month, Pennsylvania Gov. Ed Rendell endorsed a plan to keep jobs in the U.S based on a point system. The governor's proposal would incentivize contractors who work for the state by giving them credit during bidding if they guarantee the work will remain inside the U.S. The proposal does not specifically prohibit outsourcing. More information is available at: http://www.state.pa.us/papower/cwp/view.asp?A=11&Q=436390