Most State Governments Shipping Jobs Overseas

Union study finds that contracting tax-funded work to India and other low-wage nations is proliferating despite legislatures' efforts.

By Warren Vieth, LA Times Staff Writer


WASHINGTON — More than 40 state governments have contracted with companies in India and other low-wage countries to help administer new food-stamp and other taxpayer-funded programs, according to a study released Wednesday by a technology workers union.

The practice by state agencies of sending work overseas has proliferated despite efforts in many legislatures to impose restrictions on doing so, the study said, and foreign firms are becoming more aggressive in their efforts to win government contracts.

"Taxpayers clearly aren't informed," said Marcus Courtney, president of the Washington Alliance of Technology Workers, or WashTech, in Seattle. "Citizens don't necessarily know that their tax dollars are being spent overseas. This is being done quietly and secretly. Oftentimes, the state governments don't even know that this is going on."

In California, at least 11 companies specializing in "offshore" contracting are on the list of state government vendors, according to research commissioned by WashTech, an affiliate of the Communications Workers of America.

One Indian firm, R Systems Inc., has done more than $3 million in computer programming for state agencies, the study said. In addition, California is one of 42 states using overseas call centers to dispense information about a new debit card program that has replaced food stamps throughout the country.

The report's authors acknowledged that they were able to document only a portion of state government work performed overseas, and could not provide a reliable estimate of the total dollar volume of such contracting. Some states refused to disclose contact data, some lacked centralized vendor information, and some were not certain whether work was being done in the U.S. or overseas.

Nevertheless, they said the study represents one of the first efforts to quantify a practice that may have contributed to the loss of U.S. jobs, and it could increase pressure on politicians to impose restrictions. Legislation has been introduced in 36 states, including California, to limit the transfer of jobs overseas, show preference to domestic firms or increase disclosure of foreign contracting.

"A lot of people feel there is something wrong about using taxpayer dollars to create jobs offshore when there are people in this country that are without jobs," said Philip Mattera, the report's principal author. "That's a policy issue."