The State of Legislation to Disincentivise Offshoring

Very few Bills to disincentivise offshoring have been enacted into law.  California has had the best success, but even there, the majority of Bills either are voted down or more likely die in Committees, which is the favorite method of dispatch.  When bills are introduced, the recommended likelihood of success is in the single digits, meaning not likely at all.

Most of the bills that would truly discourage outsourcing have been introduced and co-sponsored by Democrats or Independents.  They have also been discouraged by Republicans and not promoted by Democrats generally.  Most are also watered down to be so specific, in order to pass, that they are not very effective.  The three areas that are usually introduced are bills that involve disclosure of such activity, involve personal information and the risk of such information going off-shore, or involve disallowance from government contracts.  See, Offshore Outsourcing – Recent U.S. Legislative Developments, Faegre Baker Daniels, May 08, 2006.  This same source stated that as of February 2006, no federal laws had been enacted directly regulating offshore outsourcing and where passed into law were only tangentially related.  It also stated that over 100 bills were introduced in 2004 and again in 2005.  The argument against such legislation is that “such measures may curb, rather than enhance, economic growth.”  See, Anti-Outsourcing Laws in the USA:  Attempts to keep jobs and data on U.S. soil, Morrison Foerster, 6-15, 2005.  Some have even claimed that there would be a net positive effect but, of course, there is never any corresponding evidence or data to support either claim and such claims can usually be traced to an interested source.

Because of a lack of movement on the part of Congress, many states have begun to take the matter into their own hands.  But the states are limited in their ability to address it in a meaningful coordinated way.  Most of the state bills involve denying state contracts.  The argument against these bills are that there would be an increase in state contract costs as a result.

Yet, there would be rewards that could be obtained by disincentivising what is obviously an “un-American” activity and to the detriment of our country and those businesses that would not want to engage in what they believe to be un-American activity or simply don’t want to be forced to leave the U.S.  It also results in fewer buyers, or if you prefer, consumers with disposable income that would result in a boomerang effect to the detriment of the very businesses encouraging offshoring.   For example, Walmart was a great promoter of offshoring production for lower prices, however, the chain has seen a drop in its customer base and in 2014 the CEO stated Walmart was experiencing a retail “funk.”  See, Retailer Revelations – Why America’s Struggling Middle Class Has Businesses Scared, Brendan V. Duke and Ike Lee, Center for American Progress, October 2014.  In 2018, despite the Trump tax law, they began layoffs.    Not all of these woes can be laid at the foot of internet competition. With offshoring comes the wholesale destruction of buyers changing what used to be a vibrant economy.

So why is Congress not succeeding in this area?  The answer of what appears to be causing such failure has much to do with the two parties.  The Republican Party appears to be steadfastly against any such measure of any kind.  Being funded by large corporate donations, the Republican Party has steadfastly kept its voting members in line with very few introducing, co-sponsoring, or even voting for such legislation.  The Democratic Party, because of the decline of the unions and most large donations are coming from corporate interests now, have been reluctant to embrace measures that would be detrimental to donations.  Consequently, some of their members may introduce and co-sponsor such measures, but there is little support generally and little discussion or emphasis to assist.

It is for that reason that this site is providing a way to see how your representatives have been voting on these measures and how your political party has addressed such legislation.  Unless the voters award or punish their representatives at the voting booth, neither party are likely to change their inaction.