Ohio Bans Use of Public Funds for Offshore Outsourcing

The governor of Ohio issued an executive order prohibiting use of public funds for outsourcing. Seems like a no brainer right? Don't use our taxpayer dollars to offshore outsource our jobs? Believe this or not, use of our money to offshore outsource our jobs happens every day, from food stamp and unemployment support to large software design projects. Yet as a result of an investigative journalism piece, Ohio, finally, does the right thing.

Columbus, Ohio--Ohio Governor Ted Strickland today issued an executive order that prohibits the expenditure of public funds for services provided offshore.

"Outsourcing jobs does not reflect Ohio values," Strickland said. "Ohioans have been among the hardest hit by more than a decade of unfair trade agreements and the trickle-down economic policies that promoted offshoring jobs at the expense of Ohioans who work for a living. We must do everything within our power to prevent outsourcing jobs because it undermines our economic development objectives, slows our recovery and deprives Ohioans and other Americans of employment opportunities."

"Ohio's policy has been--and must continue to be--that public funds should not be spent on services provided offshore," Strickland says in the order. "Throughout my Administration, procurement procedures have been in place that restrict the purchase of offshore services. Despite these requirements, federal stimulus funds were recently used to purchase services from a domestic company which ultimately provided some of those services offshore. This incident was unacceptable and has caused me to redouble my commitment to ensure that public funds are not expended for offshore services."

Seems the State awarded a stimulus contract to support the appliance rebate program. As a result the contractor hired a bunch of El Salvadorians who also were gathering personal, sensitive financial data from Ohioans.

In March, the Department of Development awarded a $357,300 contract to Parago Inc. of Texas to administer the $11 million rebate program, which rewarded consumers with federal stimulus dollars when they bought energy-efficient appliances.

Parago never told the state that it would use a foreign call center, and the state did not require the information with bids. State officials learned about the call center from an Ohio resident who asked a call center employee where the operation was.

Below is a video report from local Columbus Ohio station NBC4i:

 

 

Any local news could find state contracts where the jobs are offshore outsourced by skimming the surface of the public records. That's if they bothered.

While this is one, just how much of Stimulus dollars alone, never mind the routine offshore outsourcing of other state and federal contracts, have been creating jobs...in other countries instead of in the United States?

More importantly, why are not other states banning the use of public funds for offshore outsourcing?

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Ohio Woos TCS as US States Beg India for Jobs

"The Purchase of Offshore Services with Public Funds Undermines Economic Development and expenditure of public funds and also undermines efforts to attract businesses to Ohio and retain them in Ohio, initiatives in which the State has invested heavily."

Good 'ol Ted, who you might even say knows more than one way to skin the American worker and recruit enterprising H-1B visa holders to his State and grab votes in November all at the same time!

Indeed, the state of Ohio has "invested heavily" in attracting businesses to Ohio.

Like "enticing" (to use his term) Indian foreign IT outsourcing giant Tata Consultancy Services (TCS) to open up shop in Cincinnati by throwing $19 million in tax credits at them. Lucky TCS!

Now, if the generous Governor Strickland would only "ban" himself from enticing foreign outsourcing companies to reap the profitable rewards of Ohio taxpayer money and recruit American IT firms that don't use H-1B visa holders and hire American contractors instead, his approval ratings might actually soar. On the other hand, they probably will anyway with this latest press release to ban offshore outsourcing...it sounds great. Really.

What I don't get is this: Why does Strickland think he has to "beg" India for jobs? Surely, if Ohio doesn't manufacture much of anything anymore, shouldn't services like IT be performed by local techies (citizens)?

Ohio Governor Ted Strickland Woos TCS, Presses India for Jobs

http://tootruthy.blogspot.com/2010/02/ohio-governor-ted-strickland-woos-...

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Child Support

As the "Ohio resident who asked a called center employee where the operation was," I can tell you the reason for the call was due to FCCS using an offshore company. Most of the time, when a company uses direct pay, the money is turned around and given to the person it is owed to. Not so with child support. The money was taking out of my ex's account and it took over TEN DAYS to get into my account. They gave me the run around, especially when I pointed out that they could sit on the money and collect interest off of it. Ohio is NOT the only state to use this agency.

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One small step

What I love about this is Nasscom's predictable response. Granted, it is no more self-serving than the politicians and corporations around the world. Add to it India Inc.’s long history of marching in step with US IT companies to sell the fallacy of labor shortage, and I have to find the posturing that's coming from them as rather hypocritical. Given the lack of impact that this bill (largely populist posturing itself) will have on them, this sounds about like if the NRA were to lobby for individuals’ rights to own nuclear weapons—not because it will have impact but to draw a line in the sand at anything that could lead in a direction they don’t like.

The last line is priceless, "because they need skilled U.S. workers for high-end work that requires a local presence." Since when? These companies do everything they can to not use local workers and now they claim to be worried about this leading to not being able to hire them.

My suggestion: Raise the H1-B fees to closer to $10K plus annual fees for extensions (if they do not exist) for all such visas (Intel, MSFT, etc.). Since this visa is about filling a shortage, it’s a minor inconvenience vs. not having the skillset at all. Additionally, since these employees are paid at or over market average in high-skill, high-demand jobs, this still only represents a small fraction of the near-to-over six figure salary they are already willing to pay for this talent.

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No Foreign Labor and Workforce reform

Yes, Cut H1-B's and Cut Offshoring.

While there are many qualified americans, many americans have a crappy work ethic. 30% plus obesity and 4 hours of daily TV = useless. whats the solution to reforming our worth ethic? Many i know seem to prefer staying home on unemployment rather than earning 50% more working.

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