Summary of Activities

Regarding Off-shore Outsourcing

June 2003-May 2004

June 2003

• On 6/10, the DPE General Board is briefed by DPE staff on the evolving crisis regarding the offshore outsourcing of tens of thousands of American white collar jobs. Board members are told of recent analysis and studies which indicate that millions of these jobs could be lost over the next five to ten years. The Board requests that the DPE immediately engage the AFL-CIO to set up a task force to address this issue and develop both federal and state strategies and legislative policy options. On 6/12 President Almeida writes to AFL-CIO President John Sweeney to request that he do so.

• On 6/18 President Almeida testified before the House Committee on Small Business—chaired by Illinois Republican Don Manzullo—at a hearing titled “Globalization of white collar jobs: Can America lose these jobs and still prosper?”  Almeida addressed the growing concern of outsourcing and the adverse effect of the H1-B and L-1 visa programs on the workforce. The full text of the testimony is available on the DPE web page, www.dpeaflcio.org

July, 2003

• DPE is advised that AFL-CIO will establish the Task Force to be composed of several departments as well as interested affiliates. Task Force holds first monthly meeting and begins discussions regarding possible policy options and needs regarding materials, fact sheets etc.
• Mike Gildea testifies before the Senate Judiciary Subcommittee on Immigration regarding L-1 guest worker visa abuses. He charges that such visas—including H-1B—help create a tech transfer pipeline that enables off-shore outsourcing by facilitating the training of large numbers of foreign guest workers in the latest technologies who then return to their home countries with their jobs soon to be followed by many more. The full text of the testimony is available on the DPE web page, www.dpeaflcio.org

• DPE begins to work with the AFL-CIO and affiliates on legislation—H.R. 1769 introduced by Reps. Phil Crane (R-IL) and Charlie Rangel (D-NY) – to reconfigure the Foreign Sales Tax/Extra-territorial Income (FSC/ETI) export tax exemption into a deduction against income. The underlying purpose of the bill is to recalibrate these tax breaks in order to subsidize domestic job creation by U.S. companies/foreign subsidiaries operating in the U.S. whether they export or not. Earlier in 2003, the World Trade Organization (WTO) ruled that the pre-existing, $5 billion FSC/ETI tax break for American companies to promote exports of U.S. products and thus generate domestic jobs was WTO non-compliant. The WTO demanded that the U.S. act quickly to get rid of this allegedly illegal export subsidy or face retaliation. Labor backed legislation. While the legislation’s primary thrust is to stimulate manufacturing but the bill’s broad definition of “production” included both software development and other tech related work as well as film and music production— two industries also plagued by increasing job losses due to runaway/offshore production in recent years.

 August, 2003

• During the August Congressional recess, DPE Executive Director Mike Gildea participates in an AFL-CIO-arranged meeting with Senate Finance Committee staff – Ed McClellan, tax counsel to Chairman Chuck Grassley (R-IA) and Russ Sullivan, tax counsel to ranking minority member Max Baucus (D-MT). He and other affiliates urge that the broadened definitions in the draft Senate version of the FSC/ETI bill be retained to include TV/movie production as well as software development and other tech related products. The final version of this bi-partisan bill – S. 1637, sponsored by Grassley and Baucus – does so.

September, 2003

• The Finance Committee markup on the FSC/ETI bill includes both TV/movie production as well as software development and other tech related products. As eligible for the reconfigured tax breaks. In addition, Sen. Blanche Lincoln (D-AR) succeeds in adding her legislation to provide wage-based tax credits for the film industry to encourage more U.S. and less runaway movie production. AFL-CIO and DPE also meet with staff of Senate Minority Leader Tom Daschle to discuss strategies related to Senate floor consideration of this legislation.
• On 9/17 rep James Walsh (R-NY) introduces H.R. 3134 to require any prospective U.S. government contractor to employ 50% of their workforce in the U.S.

 October, 2003

• The House Small Business Committee holds another hearing on offshore outsourcing headlined as The Offshoring of High Skilled Jobs. Chairman Manzullo has now become one of the most outspoken members of Congress on this issue. DPE arranges for a witness – Natasha Humphries, an African American, Stanford-educated, displaced tech worker and new TechsUnite/CWA activist – to testify at the hearing on 10/20. Humphries was formerly with the company that makes the Palm Pilot. She was detailed by the company to train workers at their Indian subsidiary. Less than two months after her return her job was outsourced back to India. Her testimony was the most compelling of the four witnesses that testified with her during a panel presentation and was well received by Manzullo and the other legislators who attended.
• House Ways and Means Committee reports H.R. 2896—the FSC/ETI bill. The Committee rejects the labor- backed Crane-Rangel approach and endorses legislation that tilts the tax benefits towards multi-national companies moving production overseas. AFL-CIO opposes the bill.
• On 10/23 Senate approves H.R. 2989—the DOT, Treasury and independent agencies appropriations bill .with first anti-offshore outsourcing restriction. The senate adopts by a 95-1 vote an amendment by Senators Craig Thomas (R-WY) and George Voinovich (R-OH) that restricts outsourcing of federal government contracts that are covered by the OMB circular A-76 process.

• The Department continues to meet on a monthly basis with the AFL-CIO Task Force on off-shore outsourcing composed of key Federation public policy staff and representatives of DPE affiliates. Outsourcing has now hit the front page and TV news screens around the nation as tens of thousands of professional jobs are being exported to India and other nations. Predictions are that the current trickle will reach tidal wave proportions over the next five years as millions of these jobs go off-shore. The Task Force is formulating state legislative strategies to discourage state governments from letting contracts to companies that outsource the work as well as reviewing appropriate federal legislative and regulatory strategies. 
• On 9/19, Voice of America interviews President Almeida on outsourcing. DPE Executive Director Mike Gildea is quoted in the Bureau of National Affairs’ Labor Relations Week on outsourcing. 

November, 2003

• DPE Executive Committee directs department to prepare draft resolution on off-shore outsourcing for submission to AFL-CIO for consideration at the Federation’s March Executive council meeting.
• On 11/19 Sen. John Kerry introduces S.1873—the Call center Consumer’s Right to Know Act—to require employees at call centers that initiate or receive calls to disclose the physical location of such employees.
• DPE joins representatives of CWA’s TechsUnite at a meeting with Maryland Delegate Pauline Menes (D-College Park) about her plans to reintroduce legislation to stop export of white-collar jobs from Maryland. Her legislation, like measures in other states, would ban state agencies and contractors from exporting white-collar jobs – computer techs, data processing, engineering, call centers and the like – to other countries. President Almeida and Mike Gildea attend the strategy session.
• Mike Gildea and AFL-CIO representatives meet with House Small business Committee Chairman to discuss his efforts to block consideration of the Ways and Means Committee version of the FSC/ETI bill—H.R. 2896 because its tax breaks are weighted to heavily towards multinational firms that offshore American jobs. Manzullo asks for help in getting Republican signatures on a letter to House GOP leadership indicating that the signatories will vote against the bill should it come to the House floor in its present form. Labor strongly encourages Manzullo and agrees to help him round up co-signers. Nearly 30 GOP members eventually sign on. Manzullo’s strategy blocks quick House action on the bill and stalls it consideration well into 2004.
• In the press, Mike Gildea is quoted in the Cincinnati Post in an article about the outsourcing of jobs in southern Ohio.

December, 2003

• President Almeida addresses the D.C. Chapter of the Industrial Relations Research Association in December on the offshoring crisis. Remarks are available at www.dpeaflcio.org. Almeida also participates in the Information Policy Institute’s (IPI) symposium on off-shoring along with over 85 attendees from over 60 different organizations representing labor, industry, government and academia.

• Executive Director Mike Gildea works with the producers of CNN’s Lou Dobbs MoneyLine on another of his Exporting America segments i.e. the outsourcing of U.S. white collar/technical jobs. The segment features two new CWA Washtech members – Sona Shah and Natasha Humphries – telling their respective stories about displacement due to H-1B visas and off-shoring of jobs; Rep Rosa DeLauro discussing her L-1guest worker visa reform bill (which DPE helped to draft) and; Gildea talking about growing public and congressional awareness about these issues.
• The December issue of PRISM magazine, the monthly publication of the American Society for Engineering Education, features a series of articles on offshoring under the cover title “Eating America’s Lunch: How global competitors are swallowing up the nation’s high-tech jobs.” President Almeida is quoted extensively in the article entitled “My Job Lies Over the Ocean.”  

January, 2004

• The return of Congress brings with it a heightened interest in the off-shore outsourcing issue as it catches fire in the Democratic presidential primaries. News outlets and networks are now daily breaking news stories on the loss of American white collar jobs as Lou Dobbs on CNN’s MoneyLine hammers away on the issue every night on his evening broadcasts.
• Immediately after the Senate returns, an amendment to H. R. 2673--the Consolidated Appropriations bill--is adopted to restrict the off-shoring of federal contracts subject to the A-76 contracting out protocols. Although modest and only temporary through next fall, this action follows the earlier adoption of the Thomas/Voinovich amendment to the DOT-Treasury appropriations bill (See October). The provision holds in the final conference report on the spending bill and is signed into law by President Bush.
• Maryland Delegate Menes re-introduces her anti-outsourcing bill as a flood of state proposals come to the forefront in over 15 legislatures.
• DPE joins a coalition called the Jobs and Trade Network (JTN)—a coalition of primarily manufacturing unions, small businesses as well as other fair trade advocacy organizations. JTN is intended to bring as many organizations as possible under one tent by serving as a mechanism to facilitate information sharing; coordinate activities among  the many fair trade groups; provide research and commentary on fair trade issues; and hopefully influence legislation and public policy debate on the trade issues, including the 2004 election cycle. President Almeida addresses the coalition’s first meeting.
• CWA’s Tony Daley starts daily “blog” (web log) of newspaper areticles from around the country on off-shore outsourcing which can be accessed through http://www.cwa-union.org/outsourcing  Username-outsourcing; password-farm_in

• On Sunday 1/11, President Almeida appears on CNN’s Sunday Morning News show to debate Bob Thibedeau, CEO of White Label, on the issue of off-shoring.

February, 2004

• The Department completes draft policy resolution. After review by DPE affiliates, the draft resolution is sent to Federation staff in anticipation of consideration/approval at the upcoming AFL-CIO Executive Council meetings. The resolution—which was developed at the request of the DPE Executive Committee at its November meeting—includes over a dozen suggested legislative options for confronting the offshore tidal wave.
• Mike Gildea testifies before the House International Relations Committee regarding L-1 guest worker visa abuses. He charges that such visas—including H-1B—help create a tech transfer pipeline that enables off-shore outsourcing by facilitating the training of large numbers of foreign guest workers in the latest technologies who then return to their home countries with their jobs soon to be followed by many more. The full text of the testimony is available on the DPE web page, www.dpeaflcio.org
• Executive Director Mike Gildea confers with AFL-CIO staff regarding one of those options—extension of Trade Adjustment Assistance benefits for service sector workers whose jobs are lost to trade. Proposals are now being developed in the House and Senate to accomplish this goal.
• Gildea joins AFL-CIO representatives at a meeting requested by the staff of Senator Chris Dodd (D-CT) to discuss possible legislative amendments including prevention of the offshoring of federal government contracts.
• On 2/12 Senator Dodd introduces S. 2094, legislation to prohibit the offshore outsourcing of federal contracts (subject to the OMB circular A-76 process) unless the President deems a contract to be in the national security interests of the U.S. The legislation would make permanent the restrictions adopted earlier by the Senate to H.R. 2673 (See January). Reps John Dingell (D-MI and Rosa DeLauro (D-CN) introduce similar House legislation—H.R. 3820. Legislation would also apply to state contracts underwritten with federal funds.  
• President Paul Almeida testifies before the MD House of Delegates Health and Government Operations Committee on legislation to ban the off-shoring of state contracts along with representatives of AFSCME, CWA and the state AFL-CIO. Over 30 states are now considering proposals to deal with off-shoring making it the most prominent issue in the state legislatures this year. The full text of the testimony is available at www.dpeaflcio.org/news/speeches.htm.
• The AFL-CIO’s off-shoring task force—set up at the request of DPE—completes development of model legislation, fact sheets, a state status report and a wealth of other materials. The Federation is working closely with the state AFL-CIO’s to advance the anti-offshoring agenda.
• The Task Force and key affiliates led by AFSCME develop, in consultation with Sen. Jon Corzine (D-NJ), an amendment to the pending Temporary Assistance for Needy Families (welfare) legislation an amendment to prevent the offshoring of service contracts funded by federal dollars.
• President Almeida addressed a gathering of 100 students, educators, and business representatives at George Mason University. The program was sponsored by the Technology Management Program and The Technology Management Education Association. Also presenting at this forum was Chris Israel Deputy Assistant Secretary for Technology Policy at the U.S. Commerce Department. After presentations, a lively question and answer period followed. Surprisingly many from the business community voiced concerns over the issue of trading away the nation’s technical expertise. 
• During the month, Executive Director Mike Gildea is quoted in feature articles published by the Rocky Mountain News (Denver) and the Charlotte News Observer.

March, 2004

• Bush’s chairman of his Council of Economic Advisors—Gregory Mankiw—sets off a firestorm when he says outsourcing of American jobs is “a good thing.” Democrats have a field day as Republicans try to duck for cover. Even the Speaker of the House Dennis Hastert, in a rare public criticism of the White House, disavows the Mankiw statement. Meanwhile a long list of congressional legislative proposals—some bi-partisan—begins to emerge as amendments to pending legislation.

• The AFL-CIO Executive Council unanimously adopts DPE-authored policy resolution, originally developed at the request of the DPE Executive committee, which includes over a dozen suggested legislative options for confronting the offshore tidal wave. Several of the policy proposals contained in the resolution are now taking shape in the Congress. Copy available from the AFL-CIO web page at www.aflcio.org/aboutaflcio/ecouncil/ec03112004i.cfm.
• Senators Daschle and Kennedy introduce S. 2090, to amend the WARN act requiring companies to disclose and report to the DOL when they lay off more than 15 workers and ship jobs overseas. 
• Following earlier meetings with AFL-CIO reps and DPE Executive Director Mike Gildea, the staff of Senator Chris Dodd (D-CT) crafts an amendment to the pending FSC/ETI legislation — S.1637—to restrict the offshoring of both federal government contracts and federally-funded state contracts.
• In a 3/3 policy letter regarding S. 1637, the DPE communicates its support of the Dodd amendment, a proposal by Senator Hollings to shift $37 billion away from overseas corporate tax incentives to job creation in the U.S., and a Harkin amendment to block the DOL’s anti-overtime rules. A copy of the policy letter is available at www.dpeaflcio.org.
• The Senate passes a modified Dodd amendment by a 70-24 vote as other anti-offshoring amendments are lined up to the FSC/ETI bill.
• Other discussions result in the drafting of an array of proposals to address the offshoring crisis including an extension of Trade Adjustment Assistance (TAA) benefits for service sector workers whose jobs are lost to offshoring, and to block the use of federal welfare funds to offshore beneficiary call centers and other services/activities.
• Senators Baucus and Coleman introduce  S. 2157, legislation to extend trade adjustment assistance benefits to service sector and white collar workers displaced as a result of trade policies. Similar bi-partisan legislation introduced in the House.
• Over 30 states continue to consider a wide variety of offshoring legislation. In late March, Michigan Governor Jennifer Granholm issued executive orders to discourage the offshoring of state resources. A comprehensive, status report on state offshoring initiatives is developed by AFL-CIO staff (available from Naomi Walker at the AFL-CIO at nwalker@aflcio.org.)
• DPE also works with the AFL-CIO Public Policy Department to fashion a point-by-point rebuttal to the Information Technology Association of America (ITAA) letter to the Maryland House of Delegates opposing pending anti-outsourcing legislation. The ITAA is a national leader in the fight to stop both federal and state anti-offshoring initiatives.
• President Almeida, along with AFL-CIO representatives Ron Blackwell and Bob Baugh, meet with a GAO team charged with doing a study on outsourcing/offshoring requested by Congress. The meeting was to provide the GAO with the areas of concern to labor. The issue date for the GAO study is not yet available.
• President Almeida addresses a gathering of the Citizens Trade Campaign on the downside of offshoring on state and local governments at their annual directors’ meeting in Washington, DC.
• President Almeida quoted in 3/24 article entitled “Facing the challenges of a global work force” in the Pittsburgh Post-Gazette

April, 2004

• Senate action on the FSC/ETI bill continues to be stalled by the GOP leadership who don’t want to vote on the Harkin anti-overtime regulations amendment. In the meantime a host of Senators line up a variety of amendments to deal with the off-shore outsourcing controversy. In the House, the Manzullo block of recalcitrant republicans continues to block consideration of the H.R. 2896—the FSC/ETI bill.
• On the press front, Executive Director Mike Gildea was featured live on April 1 on the Fox News Channel Network in a debate on offshoring and was quoted in USA Today on the same issue. 
• President Almeida participates in a policy forum in San Francisco sponsored by The Economist and the World Affairs Council of Northern California entitled “The New Jobs Migration” focusing on the ramifications of white collar outsourcing. Panelists include: Diana Farrell, Director, McKinsey Global Institute; John Templeton, Co-convener, Coalition for Fair Employment in Silicon Valley; Harris Miller, President, Information Technology Association of America; and Ben Edwards, Moderator, American Business Editor, The Economist.
• In mid-April President Almeida addresses the legislative conference of the Utility Workers Union on the offshoring crisis.
• In late April President Almeida participates in another forum at MIT sponsored by The Indian Entrepreneur of Boston and the Indian American Political Forum for Political Education. The panelists are: Dr. Amar Gupta, Professor, Sloan School of Management, MIT; Max Michaels, Director, Cryztal Capital; Ian Fletcher, VP for Government Relations, American Engineering Association; and moderator Dick Gordon, host of NPR's “The Connection.”
• Pamela Wilson develops DPE Fact Sheet analyzing most recent BLS reforecast of 10 year job projections. Analysis shows dramatic shift of job creation from higher-end white collar jobs, to lower-end service industry employment with significant losses in key tech sector occupations. A copy of the fact sheet is available at www.dpeaflcio.org.

May, 2004

• The Senate completed action on S. 1637 to reconfigure the Foreign Sales Tax/Extra-territorial Income (FSC/ETI) export tax exemption that violates WTO rules. DPE backed AFL-CIO efforts in the Senate to slash tax breaks in the Finance Committee bill for U.S. based multi-national companies that were seen as incentives to off-shore U.S. jobs. During on-again, off-again debate the Senate:
  • Approved a modified amendment by Sen. Chris Dodd (D-CN) restricting federal government contracts from being outsourced under certain circumstances.
  • Rejected by a 45- 54 vote a bipartisan effort by Senators Norm Coleman (R-MN), Max Baucus (D-MT) and Ron Wyden (D-OR) to extend Trade Adjustment Assistance benefits to white collar and service sector workers displaced by trade policy actions. The amendment failed to get the 60 votes necessary under Senate budget waiver procedures.
  • Rejected on a 60-39 motion to table an amendment by Senators Byron Dorgan (D-ND) and Barbara Mikulski (D-MD) to eliminate foreign tax deferral for companies that export U.S. jobs.
  • Defeated by a 74 to 23 vote a labor-backed amendment by Sen. Fritz Hollings (D-SC) to strip out of the bill some $37 billion in tax breaks that underwrite outsourcing of U.S. jobs

Action in the House had been stalled due to the refusal of 25-30 republicans to support the underlying bill—H.R. 2896—because its tax breaks for U.S. firms that relocate jobs overseas are too large. This GOP breakaway has been lead by Rep. Don Manzullo (R-IL) who chairs the House Small Business Committee. (Under his leadership the committee has held several hearings about off-shore outsourcing at which both the DPE and AFL-CIO have testified.)

• In Maryland, the Democratically-controlled state legislature passed a watered down version of anti-offshore legislation. The original bill, introduced by Delegate Pauline Menes and Senator Paul Pinsky would have banned the off-shoring of state contracts. President Paul Almeida had testified earlier in the year in support of the legislation before the MD House of Delegates Health and Government Operations Committee. The final legislation only authorized the state Board of Public Works--which has authority over public contracts--to consider off-shoring as a factor in awarding the contract. But even this was too much of an intrusion for Maryland’s pro-business GOP governor Bob Ehrlich who vetoed the bill in late May.
• During May, the Senate Judiciary Committee scheduled and rescheduled markups on S. 1635 introduced by Immigration Subcommittee Chairman Saxby Chambliss (R-GA) dealing with the much abused L-1 guest worker visa program. Under L-1, multinational corporations are authorized to bring into the country employees from their overseas subsidiaries on an “intra-company transfer” basis. From 1995 through 2001 the volume of L-1 visas issued doubled to nearly 60,000 as companies: sought to bypass the minimum worker protection standards in the H-1B program, and; began to use the program as a tech transfer pipeline that enables off-shore outsourcing by facilitating the training of large numbers of foreign guest workers in the latest technologies who then return to their home countries with their jobs soon to be followed by many more. As the Committee markup approached, DPE Executive Director Mike Gildea, who had testified before the House and Senate regarding needed L-1 reforms, lobbied Senate Judiciary Democratic and Republican staff to consider offering possible amendments along the lines of reform legislation. DPE sends policy letter to Committee members urging support for amendments. As of this writing, another markup was scheduled for early June. A copy of the policy letter is available at www.dpeaflcio.org.
• On 5/24 Sen. Hillary Clinton introduces S. 2471 to regulate the transmission of personally identifiable information to foreign affiliates and subcontractors by protect the privacy and security of such personal data.

June, 2004

• DPE issues press release at press conference highlighting most recent BLS reforecast of 10 year job projections. Data shows dramatic shift of job creation from higher-end white collar jobs, to lower-end service industry employment with significant losses in key tech sector occupations. Analysis also includes references to high levels of joblessness among college-educated Americans coupled with longer than normal periods of unemployment. Press release available at www.dpeaflcio.org.