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Outsourcing: Merely a Political Slogan?

Thursday, April 29, 2004 at 9:06 AM

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Job outsourcing is a major theme in the presidential campaign, and it's also getting lots of attention from state officials. This month, Ohio lawmakers from both parties introduced bills to address the shipping of work overseas. But, as ideastream's Tasha Cook reports, some question whether outsourcing has become merely a political slogan.

When Democratic presidential candidate John Kerry came to Ohio just days before the state’s primary, his rallying cry was about jobs. Jobs lost, that is, from outsourcing.

John Kerry: Number one: We’re going to close those loopholes that actually excite, and invite, and reward a company that takes the jobs overseas.

Outsourcing has become the latest buzzword of the political season. In Columbus, both Democrats and Republicans have jumped on the bandwagon. Two bipartisan bills introduced this month would require companies with state contracts or tax incentives to prove their work is done in the United States.

State Senator Bob Hagan, a Youngstown Democrat, isn’t surprised by Republicans’ support.

Bob Hagan: They’re also catching on to the fact that this is a hot button state politically for the presidential, and I think they’re just trying to take the issue. Now, I don’t really care who takes the issue and wins, but we absolutely need the support of everyone to keep job drain from hitting this state any harder than it has.

Hagan has urged Governor Bob Taft to sign an executive order to reduce outsourcing. Taft initially said he would consider issuing one, but then backed away out of concern about sending the wrong message to companies doing business with the state of Ohio. Taft spokesman Orest Holubeck.

Orest Holubeck: It’s a very important issue to Governor Taft, but we do have to be careful about putting up barriers to free trade because of all the benefits Ohio has seen from that trade.

Local business and union leaders agree that companies outsource jobs to cut production costs and increase efficiency. But many say much of the outsourcing talk is mostly political grandstanding, since few companies would be able to comply with the bills in the global marketplace. And some politicians even predict the bills will fail.

Still, the proposed anti-outsourcing legislation pleases John Ryan, executive secretary of the AFL-CIO in Cleveland. He wants something done to stop the hemorrhaging of Ohio manufacturing jobs.

John Ryan: In order to see changes take place, you need the political rhetoric first and so we’re at least happy that people from both parties and the person we’ve endorsed for president has supported some discussion and has recognized we need to make change.

But not everyone agrees on the matter entirely. David Megenhardt is executive director of the United Labor Agency, a non-profit labor movement group that runs, among other things, programs that help displaced workers. His agency is comprised of the Cleveland AFL-CIO, the Teamsters and the United Auto Workers. Megenhardt sees more pressing issues, but fields calls from all over the world about outsourcing in Ohio.

David Megenhardt: It kind of comes as a shock to them that here’s a program that works with unemployed people, and you know, a large volume, in an area that has been hard hit with economic loss, and that we don’t have a story to tell right now about outsourcing. We haven’t seen large-scale outsourcing at this point.

Megenhardt says outsourcing refers generally to white collar jobs in the information technology and customer-service sectors. Ohio has fewer information technology jobs than other states like California or Texas.

Outsourcing goes beyond the borders of the U.S. In fact, it’s a decades-old phenomenon of the global economy, according to Paul Gerhart, a labor professor at the Weatherhead School of Management at Case Western Reserve University. During an economic downturn, he says, political concerns mount.

Paul Gerhart: If we were growing, if we had come out of this recovery in sort of a traditional way with job gains, you wouldn’t hear nearly as much about the export of jobs.

The public also doesn’t hear much about foreign companies that employ U.S. workers. In Ohio, the figure stands at 242,000, according to Nancy McLernon of the Organization for International Investment, a business association representing U.S. subsidiaries of foreign companies.

Nancy McLernon: Global trade is a two-way street. Just as U.S. companies are investing overseas and employing people there, we have thousands upon thousands of foreign companies that come to the United States, invest here and employ people here.

McLernon contends that outsourcing is being used for political gain.

Nancy McLernon: It’s an election year and I think a lot of politicians are using this as a big campaign issue and the media is reporting on it.

Republican state representative Jim Trakas recently introduced an outsourcing bill. He acknowledges the issue has become highly politicized, especially for him. He’s received criticism from business leaders, and he concedes the legislation is unlikely to pass. Asked whether political posturing may be at play, Trakas had this to say.

Jim Trakas: Politicians have been known to do something like that, and particularly, in an election year, I think the national campaign’s run a lot of these things.

Local economists say it’s nearly impossible to accurately estimate job losses or gains due to outsourcing or international free trade agreements like NAFTA. Despite this absence of verified data, the debate about outsourcing will continue throughout this election year. In Cleveland, Tasha Cook, 90.3.

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