A New Bill Crunches Down On Outsourcing In The US

anti outsourcing

The economic weather in the US has not warmed since the recession of 2008. With the jobs in US being shaky at best, most American citizens are voting to retain as many jobs as possible within the country. Supporting the notion is the anti-outsourcing bill that has reached the US congress through a bipartisan group of six US lawmakers.

The torch bearer for the bill is Tim Bishop, a US Congressman. The bill dubbed, ‘US Call Center and Consumer Protection Act of 2013’ withholds federal grants and loans to companies that send their call center operations overseas.

The Legislation

Besides Tim Bishop, five other lawmakers are keen on seeing the bill through. Gene Green, Mike Grimm, Mike Michaud, Chris Gibson and Dave McKinley are the pillars behind the bill.

The bill relies on the US department of Labor to track firms that absolve their call center operations to offshores operations. US companies according to the bill will be required to disclose the locations of their overseas operations. Further the companies will also have to give consumers an option to be transferred to a US based operation for support and assistance of any kind.

If the US Department of Labor does find out that a company is sending operations overseas, the company will not be eligible to receive any tax payer benefits including direct or indirect loans. The bill also proposes to give companies that return operations to US, eligibility to receive taxpayer assistance.

The Implications

The bill and the taxpayers rooting for the bill intend to boost the American economy by retaining and creating new employment positions in the country as against creating jobs in offshore locations.

Tim Bishop was quoted as saying, “If you bet against America and outsource jobs, American taxpayers turn their backs on you – it’s that simple. Our strong bipartisan coalition speaks with one voice, only good corporate citizens who grow jobs in America deserve taxpayer support.”

Dave McKinley believed that the bill will provide active ‘disincentive’ for companies to send business processes overseas. He was also quoted as saying, “Our number one priority in Congress is not only creating but keeping American jobs, and this bill could help save thousands of them, we should not mandate that companies keep all of their call centers here in America and we also don’t have to help them finance the off-shoring of American jobs by providing them with federal funds.”

The sentiments are echoed in the 700,000 strong team of Communications Workers of America. Although the sentiments are unequivocally the same across the country, this bill is not the first of its kind.

Tim Bishop sponsored a similar bill in 2011 which had the support of 135 bipartisan cosponsors in the House of Representatives. The bill was however, declined as it did not receive a full floor vote.

The Indian Implication

The Indian operations have recently been under extreme scrutiny with rumors about security breaches abound. Pricewaterhouse Coopers, a renowned auditing company recently conducted a survey according to which nearly 83 percent of outsourcing firms based in India had faced some sort of an information security breach in the past year.

In addition to the fears about information security, Indian call centers are believed to sub-outsource their operations to politically unstable and potentially corrupt centers such as Egypt, China, Thailand, the Czech Republic and Mexico. This form of sub-outsourcing, according to a statement issued by Tim Bishop’s office, was believed to muddle and make impossible any efforts to apprehend rampant security breaches.

While the bill will adversely affect nearly every nation that has a stake in the business process outsourcing market, India will be severely affected as the American market is a major contributor to Indian operations. Apart from voice service centers, financial and back office operations that India has hard won from competitors like the Philippines stand to be reverted to the US.

In order to combat the mistrust and termination of contracts, that have become the basis of a good portion of the economy and numerous jobs, India has to tighten operations. Virtual security walls that will combat threats and information leaks will have to be erected. The outcome of the bill and its implications on the Indian call center operations remains to be seen as the relationship is definitely one of dependence.

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