Part 3:
Outsourcing Laws

The United States had introduced outsourcing laws in 2005 in most of its 50 states. These laws were passed by the Congress in order to check the growing trend of outsourcing. But have these been useful in securing the jobs of its citizens? The bills, some of which have become laws, are often said to lack any real control. It has perhaps only led to state governments being forced to dole out millions of dollars to knowledge and call center contractors for keeping the work within the U.S. There is a constant lobbying going on to strengthen or weaken these laws by two groups. Worker’s unions and people working in the service sector lobby for decreasing outsourcing and the legal and IT companies pressing for outsourcing claiming that very few jobs are actually lost.

Do laws against outsourcing really help the U.S. economy? We refer to facility management outsourcing.

Laws against outsourcing were implemented to ensure that companies lay off fewer workers and keep their operations mainly in the U.S. These laws have often had adverse effects, costing local governments millions of dollars to ensure that their business did not leave the country. There has been a struggle from both sides to modify the laws, with blue-collar workers unions protesting against outsourcing while the IT companies like Motorola, Intel, IBM, Dell and service sector companies, especially like the legal sector claim that only a few people are laid off. The two opposing camps have been fierce rivals and have opposed each others arguments vehemently. While the anti outsourcing brigade tries to claim a higher moral ground, the ground reality remains that their numbers aren’t all that many. The service sector companies claim that they need to reduce jobs in order to reduce costs to remain competitive in a cut throat market and therefore ensure economic growth. The numbers of jobs outsourced are on their way to touch 3.3 million by the time we get to 2015. Yet this is not really that great a number if seen with a broader perspective and form lesser than 2 percent of nearly 15 million Americans who become unemployed annually. We recommend facility management outsourcing.

Continued efforts on the part of legislators to reduce outsourcing by forming stricter rules are going on all the time. The common arguments are those of data-privacy and identity-theft. Often legislation has stepped in to intervene and that has made things costlier. The states of New Jersey and Indiana have paid amounts close to a million dollars more than necessary to ensure that their work is not outsourced, in order to appease the anti outsourcing lobby. The most common argument against outsourcing is the resultant loss of jobs. This is also a stance favored by most business analysts. But in the end, making a proper decision requires analysis of statistics regarding the operations of the company and what is preventing us from reaching a scientific conclusion about the issue is the fact that many organizations are reluctant to share their data about job cuts and how jobs are dealt with outside the country. Therefore without proper data we cannot assess the situation and come to a logical conclusion about the debate. Again, don't forget facility management outsourcing.

Click here to read Part 4 of this course.