As outsourcing has become an increasingly critical issue for businesses across the United States, Connecticut is one of a number of states pushing for legislation that would prevent companies from transferring jobs overseas. But while many cities like New Haven, have suffered losses in manufacturing and information technology sectors, some policymakers have expressed concerns over the constraints such legislation would have on the local economy.
Connecticut Congresswoman Rosa DeLauro and State Attorney General Richard Blumenthal held a press conference Monday in support of state legislation that would deny significant public funding to companies that outsource jobs. There are currently four bills involving the protection of domestic jobs working their way through the Connecticut General Assembly.
“This is a nonpartisan issue,” DeLauro said. “Every state, every community is experiencing this difficulty with outsourcing.”
DeLauro said although the public must accept today’s global economy, it is wrong for the state to offer companies the opportunity to transport jobs and technology away from Connecticut. Rather, she said initiatives such as changes in the tax code are the best way to keep the domestic economy healthy.
“Public funds should not be used to take jobs out of the country,” DeLauro said.
Tony Rescigno, president of the Greater New Haven Chamber of Commerce, said job loss has certainly hurt New Haven and the surrounding region over the past two or three years — particularly in the information technology sector.
“This is a global economy — there’s no question that people are being impacted by outsourcing, and that hurts,” he said.
But Rescigno said altering the way companies currently operate could backfire. He said although unemployment in New Haven has remained steadily beneath levels in other areas in the state, businesses need to focus on improving quality and efficiency as much as possible in order to keep jobs in the area.
“We don’t like it, but we’re not sure the solution is to legislate this thing,” Rescigno said.
He said the Chamber has not yet taken an official stance on DeLauro’s proposed legislation.
Joe Brennan, vice president of Government Affairs at the Connecticut Business and Industry Association, said the legislation proposed by DeLauro and other state lawmakers could seriously harm the future of Connecticut businesses. Connecticut, which exports about $8 billion worth of goods every year, is also home to more than 1,200 foreign-owned businesses — some of which might retaliate when confronted with protectionist legislation.
“It’s certainly in our best interest to have as many companies and jobs in the States as possible,” he said.
Brennan said because the cost to do business in Connecticut is high relative to other states, sectors like manufacturing have been hit especially hard.
“We’re always fighting to remain as competitive as possible — as the world gets more competitive, it’s more difficult to do business here,” he said.
Brennan said while the punitive measures embodied by the proposed legislation may be counterproductive, the best way to keep jobs in the state would be to give incentives for businesses to locate domestically, hire American workers, and develop new technology. But he said because the state does not have the budget to undertake such legislation, it should do as much as it can to encourage businesses to remain competitive.
“We need to avoid changes that would drive up the cost of doing business,” he said. “At a minimum, they should at least take a step back and have a third party analyze this issue and determine whether these bills are called for.”
The Rowland administration opposes DeLauro’s proposed legislation, and budget advisor Marc Ryan has said he will recommend vetoing the bill if it passes through the General Assembly as it is currently written.