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If not affected directly by outsourcing you will be indirectly by the economy.

what exactly is Outsourcing, how did it get started, and how are you affected? I guarantee that if you are not affected directly by outsourcing, you are affected indirectly by a staggering economy. Here is how outsourcing can affect you.

The Defending American Jobs Act of 2004 (See Bills To Limit Outsourcing) is being introduced by Rep. Bernard Sanders (Ind.-Vt.) with 50 co-sponsors from both the Republican or Democratic parties. Why does this seem necessary?

The state level: Legislatures considering bills to limit outsourcing

1. Alabama (HB 358; SB 300)
2. Arizona (HB 2581)
3. California (AB 1829; AB 1845; SB 1452)
4. Colorado (SB 169; SB 170)
5. Connecticut (SB 430, SB 577)
6. Georgia (HB 1281)
7. Hawaii (HB 1922)
8. Illinois (HB 4550; SB 2375)
9. Indiana (SB 4; HB 1275; HB 1381; HB 1101)
10. Iowa (HF 2400; SB 2063)
11. Kansas (HB 2524)
12. Kentucky (SB 278)
13. Maryland (HB 183; HB 1458)
14. Michigan (HB 4940)
15. Minnesota (HF 1816; SF 1792)
16. Mississippi (HB 464; HB 1293)
17. Missouri (HB 1474; HB 1497; SB 1029)
18. Nebraska (LB 1223)
19. New Jersey (SB 494; AB 2133)
20. New Mexico (SB 416)
21. New York (AB 1092; SB 6040)
22. North Carolina (SB 991)
23. Rhode Island (HB 5678)
24. South Carolina (HB 4434)
25. South Dakota (HB 1116)
26. Tennessee (HB 3235; SB 2344; SB 2822)
27. Vermont (HB 647; HB 702)
28. Virginia (HB 1010; HB 243; HB 315; SB 151)
29. Washington (HB 2405; HB 2768; HB 3187; HB 2459)
30. West Virginia (HB 4644; HB 4645; SCR 76)
31. Wisconsin (AB 761; SB 389)

The federal level: Congressional bills under consideration

‘Jobs for America Act of 2004’ (Senate S 2090)
Introduced 2/12/2004, by Senate Minority Leader Tom Daschle, with co-sponsors Senators Edward Kennedy, Hillary Rodham Clinton and Tom Harkin. The bill would amend the Worker Adjustment and Retraining Notification (WARN) Act. It would require companies to give employees and communities at least three months notice before outsourcing jobs. Companies would also be compelled to report outsourced jobs to the Department of Labor, which would be required to report outsourcing statistics to Congress annually. Last action on this bill: It was referred to the Committee on Health, Education, Labor, and Pensions on February 12, 2004.

‘Dodd Amendment’ (Senate SA 2660)
Amends the ‘Jumpstart Our Business Strength (JOBS) Act’ (S 1637). Proposed 3/3/2004 by Christopher Dodd, with Edward Kennedy and Russ Feingold among the 5 co-sponsors. This amendment forbids the overseas performance of any part of a federal contract. It would also withhold federal funds from states that contract to locations outside the US. Last action on this amendment: It passed 70 – 26. Last action on the bill to which this amendment is attached: 3/24/2004 Senate floor actions. Status: Motion by Senator Frist to reconsider vote by which cloture was not invoked on the motion to recommit entered in Senate.

‘Defending American Jobs Act” (House HR 3888)

Introduced 3/3/2004 by Bernard Sanders; the bill has 66 co-sponsors, including Barney Frank and Dennis Kucinich. This bill would forbids the government from providing federal funds to companies that lay off a larger percentage of their American workers than of their foreign workers. It would affect organizations like the US Export-Import Bank and the Overseas Private Investment Corporation. Last action on this bill: It was referred to the House Committee on Government Reform on 3/3/2004.

‘Commission on American Jobs Act’ (House HR 3878)
Introduced 3/4/2004 by Maxine Waters; no co-sponsors. The measure would create the Commission on American Jobs, which would collect data on outsourcing and propose measures to limit it. Last action on this bill: It was referred to the House Committee on Education and the Workforce on 3/2/2004.

[no short title] (House HR 3191)
Introduced 3/4/2004 by Maxine Waters; no co-sponsors. The measure would prohibit any company that has outsourced jobs in the previous 5 years from receiving any federal grants, contracts, loan guarantees, or other funding. Last action on this bill: It was referred to the House Committee on Government Reform on 3/4/2004.

The federal level, part 2: Presidential candidates’ proposals

Bush:
George Bush has not specifically stated his policy position toward outsourcing. But with both N. Gregory Mankiw and John Snow—Bush’s Chief Economic Advisor and Treasury Secretary, respectively—coming out publicly in favor of outsourcing, it is likely that Bush will employ a hands-off strategy towards outsourcing companies

Kerry:
John Kerry’s proposal focuses on taxing overseas business income at the same rate as money made at home. This proposal would apply to businesses who outsource, but not those who have foreign locations to sell to foreigners. Under the current tax code, he said, companies get $8 billion a year in tax breaks by shifting operations overseas.

The global level: The World Trade Organization

Any domestic measures targeting outsourcing may be challenged at the WTO if they are seen to be in breach of our agreements there. Even if prohibiting outsourcing is technically legal under WTO rules—experts are debating this—it is widely perceived as ‘anti-free-trade” behavior on the part of the US. If US anti-outsourcing laws are found to be in violation of WTO rules, the WTO has the power to impose penalties.

Government Procurement Agreement
The Indian government recently criticized the ‘Dodd amendment’ (passed March 4 as an amendment to the ‘JOBS’ Act), which forbids outsourcing on the part of the federal or state governments. In response, the US Trade Representative, Robert Zoellick, noted that India has not signed onto the WTO Government Procurement Agreement. This voluntary plurilateral agreement (all agreements at the WTO are voluntary) specifically forbids discrimination against signatories in the area of government contracts. There are 28 signatories to this agreement, almost all of whom are developed countries.

Policy Inventory Collected by Monika Francois was on gwcsg.gwu.edu

Why does this seem necessary?

In his press statement, Rep Sanders said: "In my view, it is an insult to the middle class of this country that American taxpayer dollars are being used to provide loans, loan guarantees, grants, tax breaks and subsidies to huge and profitable corporations who then say to the American people: 'Thanks for the welfare, chumps. But we're closing your plant and taking your job to China,'"

What is Outsourcing and how did it begin?
Information Technology (IT) (otherwise known as computer and internet technology) is the initial culprit. Beginning in the late 80's, IT workers were needed to work on hardware and/or software. When the Internet exploded, IT positions swelled and commanded exceptionally high paying jobs to fill the need. Soon "everyone" had some sort of technical certification. Eventually businesses wanted a return on their IT investment and IT budgets were cut. Then economy went south and business began seeking a less expensive IT worker resource. Thus seeking a less expensive labor force outside of the U.S., (Outsourcing) began. As other departments saw a cheap labor force offering corporate savings, positions other than IT were considered for outsourcing. (See below for article called Outsourcing, IT jobs, and DBA's)

Outsourcing, IT Jobs, & DBAs
Congratulations, we worked ourselves out of our jobs. Now what do we do?
by Buck Woody

Posted May 11, 2004

I built my first computer in 1979. It had 1K of RAM, used a cassette tape as nonvolatile storage, had a black and white TV for a monitor, and the keyboard was mounted in a wooden box. I coded everything (in assembly) from the operating system through a word processor. I had a lot of fun on that little Frankenstein system. I wasn't alone—in those days many people interested in high-tech carried both a soldering iron and an assembly manual.

Most high-tech employees back then worked on mainframe systems. When PCs hit the market in 1981, there were only a few IT workers who were familiar with them, and they did it all—from hardware to software, from training to administration.

Few understood or cared what IT did or how it did it. The computer was just a black box, and the IT department was expected to keep it running. Business schools hadn't ramped up to teaching computer science disciplines yet, so having a background in the business side was essential for IT workers who needed to bridge the gap.

As LANs became more popular in the workplace, more and more IT workers were needed. Specialization began to take hold, and IT workers either worked on hardware or software—rarely both.

Then came the Internet. If you could spell IT, you could get a job. You could name your pay, and if you lived anywhere near Silicon Valley, signing bonuses and on-the-job perks were commonplace. Specialization became even more focused, not only between hardware and software, but even down to the distinctions between routers and servers, and programming and applications.

But then several major events came together to form the perfect storm. IT overheated and couldn't keep up with its promises. It seemed that everyone had some sort of technical certification, and more entered the workforce every day. Eventually businesses had enough technology; they wanted a return on their technology investment. Spending slowed, and IT budgets were cut. The U.S. economy took a nosedive, and cost pressures caused business to look for cheaper IT labor. Outsourcing, and more recently, offshoring, began.

Many have been quick to blame offshoring as the major cause for job losses in the past three years, and in fact 300,000 IT jobs have been sent to companies outside the United States. But The Wall Street Journal recently reported that a much greater percentage of jobs (more than five times as many) lost in the United States were lost to better productivity—and a lot of that is due to you and me. We created and enhanced most of the productivity gains the economy enjoyed with the application of high technology. As technology improves, more tasks can be automated, and jobs that are automated don't need to be staffed by humans.

Congratulations, we worked ourselves out of our jobs.

We can't blame our employers. A computer with an initial cost of $2,000 is cheap when compared to a person making $80,000 a year with benefits, rising health costs, and other liabilities. Companies (especially those that are publicly traded) are constantly pressured to lower costs. Add to this the fact that current U.S. tax laws reward companies for investing in machinery and not for hiring, and the recent hiring trends become understandable. We who created the productivity gains became its victims.

Like it or not, the IT employment landscape changed. Business Week recently featured an article that stated that high tech will ship overseas to cheaper workers and "high touch" will stay here. What this means is that if your job can be quantified into repeatable steps, it is a target for outsourcing. This shouldn't surprise us; many IT jobs are at companies who provide an outsourcing service themselves, such as payroll processing or Internet service hosting. It basically comes down to this: If you can write down what you do everyday in just a few pages, it can be outsourced. Even worse, it can be sent offshore if you don't need to be in a particular place to do it.

To keep your job and progress in it, you need to make it more high touch. That means that the jobs that will stay local are jobs that have close cultural ties to the business. In these jobs the technology worker has a keen understanding of the business functions at hand and understands how to communicate the benefits of their technology to those function principles.

Oddly enough, this data seems to be holding true for all countries, not just the United States. Recently, I've seen articles on a few Indian firms that are moving some IT work to China. Even then, however, familiarity with Indian business culture can keep an Indian job in India. It seems that the high-tech jobs that stay close to home are the ones that have a close affinity to the business.

And Then There Were Three
One such job is the database administrator, or DBA. DBAs have always had a business focus because they are often called on to model the data businesses need.

In this column you'll learn the various jobs of the DBA. You'll learn how to maintain a database, tune the server, and create new databases. Along the way we'll develop a real application using that database. Most of these tasks are difficult to do remotely, and all are enhanced if you understand the business.

Even if you're not interested in pursuing a career as a DBA, it helps to know how SQL Server runs because it's become so integral to all things Microsoft. So much technology cries out for a database—from Active Directory to Certificate Services right on to mail processing. Even the file system needs the advantages a good database offers. You're miles (or kilometers) ahead if you have a sound understanding of how a database system works. Besides, any knowledge is good if it keeps your job close to home.

You might be surprised to learn that DBA isn't a single title. There are several roles involved in the DBA world, each of which can be highly specialized. While these roles include many job titles, the DBA position normally falls into three main camps: administrative DBAs, development DBAs, and data architects.