The Securities Industry Association (SIA) has pleaded with the Governor of California Arnold Schwarzenegger urging him to veto proposed legislation which stipulates that work in the state can only be farmed out to firms using US workers.
The AB 1829 bill mandates that California state and government agencies can only contract with companies that are able to certify that all work will be carried out by workers in the US, and not overseas.
In the letter, Kim Chamberlain, SIA VP and counsel, state goverment affairs, states "serious concerns" about the legislation, saying that if the law were passed, the location of the worker would be of primary importance in awarding the contract, while factors such as cost and efficiency would take a back seat: "Such a requirement will increase both business costs and costs to the state of contract work."
Chamberlain refers to a call centre contract that ultimately kept 12 jobs in Camden but at a cost of $900,000 over the life of the contract, and a bid in Indiana which made sure 50 computer programming jobs stayed in the state but cost an additional $8 million in public funds.
The SIA says the mandate would place US firms "at substantial risk of retaliation" from trading partners. Citing research conducted by the Public Policy Institute (PPI) of California, the SIA says the legislation could lead to other countries imposing similar bans, preventing them from hiring workers in California, where one in four jobs currently depends on international trade.
Furthermore, the law would make it more difficult for multinational firms to invest in the US.
The nonpartisan PPI report, which was compiled at the request of the California Assembly, also conculded that the number of jobs being offshored is small compared to both the labour market and to the poeple working in "at-risk" occupations. Furthermore, the report suggests that a ban on offshoring would be unlikely to stop the activity or benefit the state.