Looking to discourage U.S. companies from moving jobs offshore, a Vermont congressman has
introduced a bill that would hit companies in the wallet for taking away American jobs.
The Defending American Jobs Act of 2004 would bar companies from receiving federal grants,
loans and loan guarantees if they layoff U.S. workers and hire foreign workers in their
place. Just announced yesterday, the bill, sponsored by Rep. Bernie Sanders (I-Vt.), already
has gained 50 Democratic co-sponsors and three Republicans.
”It is absurd that the government continues to give these companies corporate welfare off
the backs of the workers who are losing their jobs,” says Joel Barkin, a spokesman for
Sanders. ”This legislation says that if the Motorolas or GEs of the world want to offshore
work to India, china and Mexico, they’re not going to continue to get government handouts to
Barkin says Sanders has been concerned about the dramatic loss of manufacturing jobs that
have moved overseas for many years. The congressman has sponsored bills, most of which have
failed, to challenge that trend. This new effort is sparked by the continued offshoring of
manufacturing jobs and the rising loss of high-tech jobs, as well.
Offshoring is affecting Sanders’ own constituents.
IBM is the largest private employer in Vermont. In 2001, IBM laid off 15,000 U.S. workers,
while signing a deal to train 100,000 software specialists in China. That year, IBM received
more than $20 million in what Barkin calls corporate welfare, or federal loans and grants
from the U.S. Export-Import Bank.
Likewise, according to Sanders office, Motorola laid off 42,900 workers in 2001, and
invested $33 billion in China, while receiving close to $200 million in corporate funds from
the U.S. Export-Import Bank.
”In my view, it is an insult to the middle class of this country, that American taxpayer
dollars are being used to provide loans, loan guarantees, grants, tax breaks and subsidies
to huge and profitable corporations who then say to the American people, ‘Thanks for the
welfare, chumps,” Sanders said in a written statement. ”But we’re closing your plant and
taking your job to China.”
Today, U.S. companies that apply for federal grants, loans and loan guarantees are not
required to report the number of U.S. and foreign workers that they employee and how those
numbers have increased or decreased. This piece of legislation, if passed, would call for
public disclosure of how many workers they have in the U.S., how many outside of the U.S.
and a brief description of their wages.
If these companies lay off a greater percentage of U.S. workers than they do overseas, they
would be prohibited from receiving future taxpayer assistance from the federal government
until they went back to the same employment level that they had when they first applied for
”American workers are helping to pay for their own outsourcing,” says Barkin. ”We say if
you want to get this money for government programs, then you have to release information
about how many workers you’re offshoring every year.”
Not everyone, however, thinks that federal legislation can turn the tide on offshoring.
”This sort of thing is a typical political reaction to people not liking an economic trend,
and wanting the government to do something about it,” says Gordon Haff, an analyst for
Illuminata, a Nashua, N.H.-based industry analyst firm. ”When the government tries to pass
laws to legislate economics, they usually end up doing more harm than good… You can
artificially pass a bunch of does and don’ts but it doesn’t change the fact that something
is cheaper to produce elsewhere.”
Haff adds that increasing U.S. productivity is the answer to slowing offshoring, and that
can’t be changed with legislation.
Barkin counters that federal monies shouldn’t be going to companies that are laying off the
U.S. taxpayers feeding that pool of loans and grants.
Sanders was joined at Wednesday’s press conference by Reps. Peter DeFazio (D-OR), John
Conyers, (D-MI), Jerry Nadler (D-NY), Ted Strickland (D-OH) and Major Owens (D-NY).