03/21/2012 06:25 pm ET

Anti-Outsourcing Bills Would Punish Companies That Send Jobs Overseas

WASHINGTON -- Following the lead of lawmakers on Capitol Hill, several states have proposed legislation that would punish American companies that relocate their customer call centers overseas by making the companies ineligible for government loans or contracts.

The state measures appear to be modeled on a federal bill introduced in the House of Representatives late last year that Democrats argue could slow the number of call-center jobs that have been heading to India and the Philippines for the past decade. Lawmakers in Arizona, Florida and New Jersey have all subsequently proposed similar bills.

Under the federal legislation, American companies that offshore their call-center jobs would lose their federal loan eligibility for a period of five years. The customer service representatives working in those company's foreign call centers would also have to disclose their locations to callers and offer to transfer the callers to U.S.-based representatives. If the law passes, the Department of Labor would maintain a public list of companies that plan to outsource those jobs overseas.

The Communications Workers of America, a union that represents 150,000 call-center workers and has been aggressively pushing the bills, says that the number of call-center employees in the U.S. dropped from 5.2 million in 2006 to 4.7 million in 2010.

Many of those half-million jobs no doubt went to India and the Philippines, the two countries with the largest call-center industries. The federal proposal has caught the attention of those governments, with both Indian and Filipino officials suggesting they would dispatch lobbying teams to Washington.

Although lobbying reports on the bill are not available yet, Rep. Tim Bishop (D-N.Y.) said Wednesday that the Filipino and Indian governments had undertaken an "extraordinary lobbying effort" on it. "What it says to me, if U.S. call center jobs going offshore is that big a component of the Filipino or Indian economy, then we're losing a ton of jobs over there. If it's important to their economy then it's important to ours."

The federal proposal has strong support on the left, with 83 Democratic co-sponsors, compared with six Republicans in the GOP-controlled House. Many lawmakers on the right would no doubt dislike the bill's protectionist measures, as would the business community at large. Similar bills have failed in the past, including a 2010 one put forth by Sen. Chuck Schumer (D-N.Y.) that would have put an excise tax on companies that outsource their call-center jobs.

The CWA claims that in addition to discouraging outsourcing, the bill would protect American consumers. The union recently produced a report that argues that foreign call centers are more prone to security breaches with customers' personal information than their American counterparts.

A bill that recently passed the Florida state senate would require that companies with state contracts have their call centers in the U.S., but the measure was held up in the state House of Representatives. A similar bill in New Jersey would bar companies from state tax breaks and subsidies if they send their call center jobs overseas. The state Assembly passed that bill last week, though the state Senate hasn't taken it up yet.