Strategic CIO // IT Strategy
Commentary
3/14/2006
10:34 AM
Paul McDougall
Paul McDougall
Commentary
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Michigan's Anti-Outsourcing Legislation Would Cost More Jobs Than It Would Save

Democrats in the Michigan state senate on Monday introduced anti-outsourcing bills designed to put more of the state's residents out of work while raising their taxes. OK, that's not what the bills are "designed" to do, but that surely would be the outcome if they become law. And this from a party that offshored its leadership to Canada!

Democrats in the Michigan state senate on Monday introduced anti-outsourcing bills designed to put more of the state's residents out of work while raising their taxes. OK, that's not what the bills are "designed" to do, but that surely would be the outcome if they become law. And this from a party that offshored its leadership to Canada!Michigan senator Mark Schauer--who, based on his bio, has never been outside of the state--is among a group of Dems that introduced the measures. Among the proposals: a provision that would allow the state to reclaim tax abatements or grants from companies that offshore work. Another would prohibit state agencies from letting contracts go to service providers that send work overseas. The state government would also be required to maintain a list, publicly accessible on the Web, of Michigan companies that outsource.

I'm sure that these lawmakers are proposing all this with the best of intentions. I'm sure this has nothing to do with political grandstanding and photo-opping on an issue that makes for great sound bites, but is also politically and economically complex. The reality is this: Struggling Michigan employers like General Motors and Ford are sending work abroad and will continue to do so because labor is cheaper and in many cases more efficient in countries like India and China. Outsourcing also helps them establish a base in emerging regions where they eventually hope to sell billions of dollars worth of products.

Imposing penalties on locally headquartered companies for following a trend that's revolutionizing business around the world is misguided and downright harmful to the interests of Michigan workers. In a recent study, Michigan's respected Mackinac Center for Public Policy concluded that "restrictions on outsourcing are self-defeating." Anti-outsourcing provisions in state contracting "will waste state resources" and result in higher costs for state services, the study notes.

And is this a coincidence? On the same day that the Michigan Dems introduced their bills, South Korean automaker Kia said it would build a new, $1.2 billion plant in the United States. Guess where that plant isn't going? That's right, it isn't going to Michigan--it's to be built in Georgia. GM and Ford will shed a total of about 60,000 workers over the next several years, so shouldn't Michigan lawmakers spend their time luring investments that will replace those jobs rather than ensuring everything ends up in the right-to-work South?

And if they're so against offshoring, how come the Michigan Dems outsourced their own party leadership to Canadian-born governor Jennifer Granholm? Surely there must be a native Michigonian who's equally qualified to decimate the state's job base and scare off foreign investment. What's Michael Moore doing these days?

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