Lost to India - Aftermath

Date: Tuesday, February 08, 2005 3:58 PM

JOB DESTRUCTION NEWSLETTER

by Rob Sanchez
February 08, 2005 No. 1193

Bad publicity can have good results when it forces politicians to do
the right thing. In Arizona, ABC TV-15 ran a series called "Lost to
India" about how call center jobs for the state welfare system were
being outsourced to India. The report caused a furor in Arizona that
prompted politicians to propose a bill to limit the outsourcing.

A recent follow-up to the newscast is now online. I highly recommend
you watch the entire series, beginning with the Emmy Award winning show
that aired last year.

Find this videos here:

http://www.zazona.com/shameh1b/MediaClips.htm

2004 4/30 ABC KNXV15 Investigators - "Lost to India"

2004 7/23 ABC KNXV15 Investigators - "Working Conditions"

2005 1/23 ABC KNXV15 Investigators - "Lost to India - Aftermath"

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http://phoenix.bizjournals.com/phoenix/stories/2005/01/24/daily28.html

January 25, 2005
Bill proposed to prohibit 'offshoring' of state contracts
Mike Sunnucks
The Business Journal
A measure has been put forward at the state Legislature prohibiting the
foreign outsourcing of state government work.

The legislation is sponsored by three conservative Republicans and 18
Democrats.

It prohibits the state from entering into contracts or taking other
actions that results in state government jobs, contract positions or
other work being shipped outside the United States. Similar measures
are afoot in other states and face strong business opposition.

The Arizona bill would not restrict private companies from moving jobs
offshore.

Foreign outsourcing and offshoring of private and public sector jobs
has been a hot political potato in recent years, with U.S. jobs being
moved to cheaper foreign labor markets, namely China and India.

Last year, Gov. Janet Napolitano issued a directive banning foreign
outsourcing in state contracts after it was learned some
welfare-related customer service work was being done offshore by
private subcontractors.

Business interests are generally opposed to state prohibitions and
restrictions on foreign outsourcing and offshoring.

The Arizona Chamber of Commerce subtly refers to outsourcing fervor in
its 2005 agenda stating that "state tax, regulatory and procurement
policies must recognize the global integration of today's companies and
information systems."

"We believe that the outsourcing issue is misunderstood and it's not as
easy as "job A" is outsourced to India," said state chamber vice
president Farrell Quinlan.

Outsourcing defenders argue the movement of jobs overseas is part of
global economic trends and integrating U.S. and Arizona companies into
new markets. Some business groups, such as the National Association of
Manufacturers, also contend that high health care, regulatory,
insurance and legal costs in the United States make foreign markets
more affordable.

Critics, including labor unions, counter that its large corporations
dumping American workers for cheaper counterparts in India and China.

Major Arizona employers that have outsourced or offshored jobs include
Best Western International, Intel, IBM, Bank of America, JPMorgan
Chase/Bank One and Honeywell International

Sponsors of the Arizona government outsourcing ban include conservative
Republican State Sens. Karen Johnson and Robert Blendu as well as
Democratic state Sens. Victor Soltero, Bill Brotherton and Harry
Mitchell and state Reps. Meg Burton Cahill, Pete Rios and Kyrsten
Sinema.

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http://www.azcentral.com/arizonarepublic/business/articles/0202offshorebill02.html

Measure would keep state jobs in U.S.

New law would prevent use of any foreign labor

The Arizona Republic
Feb. 2, 2005 12:00 AM

A bipartisan group of state legislators has introduced a bill to
prevent any state jobs, including those contracted out, from being
performed in foreign countries.

If passed, Senate Bill 1266 would write into law a state directive
issued in April that prevents the use of foreign labor for work done
under state contracts.

The bill's lead sponsor is Democrat Victor Soltero, but a host of other
legislators, including three Republicans, have signed on. It would
prevent any state agency, board, commission or department from
"entering into an agreement or perform any act that results in a state
service position being directly or indirectly established or
transferred outside of the United States."

It goes on to clarify that any state service position applies to work
done by contractors and subcontractors.

In April, John Adler, the state procurement administrator, issued a
directive that prohibits any work performed under state contract from
being done outside the United States. But the directive did not apply
to work that wasn't directly related to the contract, such as payroll
services or data backup in other countries.

State officials could not place a dollar amount on how the policy
change will cost taxpayers but it could increase the cost of some
contracts, said Alan Ecker, spokesman for the state Department of
Administration.

"Potentially it will result in increased costs to contracts," he said.
"But it's more important to keep the jobs and work within borders of
the U.S."

Business groups have not said whether they will oppose the bill but the
executive director of the Arizona Association for Economic Development
said such bills often have unintended consequences, such as retaliation
from other countries that could hurt U.S. businesses or higher costs to
taxpayers.

"Any legislative solutions of this sort cuts both ways," John Bowers
said. "There are advantages, but invariably there's another side to
it."

Soltero, from Tucson, feels strongly that no taxpayer-supported jobs
should be done outside the United States.

"My preference is that they be done in the state, but I don't think
anybody has concerns as long as they are done in the U.S.," he said.

Sen. Robert Blendu, a Republican, signed on to the bill because he
considers it a security issue.

"The business of Arizona belongs in Arizona," he said.

The bill comes on the heels of revelations last year that public phone
calls to a call center providing service on welfare benefits was being
routed to India or Mexico. That work was being done by subcontractor
eFunds Corp., a Scottsdale-based firm that provides customer support to
clients.

The uproar led to the state policy change. No other state contracts
were affected by the change.

EFunds is no longer a state subcontractor after the prime contractor
was acquired by another contract, which did not renew the eFunds
contract. In fact, the eFunds work was brought back to the United
States in mid-November, state Department of Economic Security
spokeswoman Liz Barker said.

"EFunds is not handling any part of our contract," she said.

Forrester Research Inc. predicted last year that 3.4 million U.S.
service jobs would move offshore by 2015.

A Greater Phoenix Economic Council analysis found that 14.4 percent of
Valley jobs were vulnerable to being moved abroad.

Nationally, about 12.8 percent of service jobs were vulnerable.

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