Outsourcing generates worry — but no laws

Worries about outsourcing have state lawmakers proposing bills by the dozen and governors issuing orders aimed at keeping jobs that are tied to state government at home.

But none of the proposed bans have become law, with election-year concerns over unemployment colliding with fears that free trade could be damaged by government interference.

Critics say the measures are often veiled political attacks on President Bush that have little chance of passage because they would be economically damaging in the long run. Supporters so far have made little progress, even though 35 states are considering measures that would sharply restrict or ban outsourcing.

Meanwhile, governors in Michigan, Minnesota and North Carolina have issued orders on their own to try to rein in the practice, though they've shied away from hard and fast rules.

And last month, North Carolina legislators agreed to spend $1.2 million to bring 34 jobs back from Mumbai, India, to rural North Carolina to handle phone calls regarding child support, part of a $25-million contract with Arizona-based eFunds Corp.

Their action followed an order from North Carolina Gov. Mike Easley, a Democrat, who told state agencies to re-examine contracts with private companies for outsourcing.

"We took a look at this (question) — can we be competitive and bring those jobs back?" said Dan Gerlach, Easley's senior fiscal adviser. "Does it make sense both to taxpayers and to workers in North Carolina?"

Last year, Indiana's state government canceled a $15-million contract with an Indian consulting firm that would handle some calls in India. The bid has been reopened.

Michigan Gov. Jennifer Granholm, a Democrat, and Minnesota's GOP Gov. Tim Pawlenty both issued orders last month requiring state agencies to encourage and pursue contracts with companies that keep jobs in their state and in the United States.

"When it makes sense, we should do all we can to direct (the state's) buying power to serve American and Minnesota workers," Pawlenty said when he issued his directive.

Much of the legislation in state capitals from California to Alabama to Connecticut would seek to prohibit state contracts with companies that rely on overseas workers; others seek to discourage the practice through tax credits.