(May 20, 2004) The California Chamber of Commerce advised caution on bills dealing with worldwide outsourcing and urged legislators to avoid fear-based policy reactions following a hearing Tuesday convened by the Assembly Office of Policy Planning and Research by Director Assemblyman Joe Nation (D-San Rafael).

Bills to limit or restrict worldwide outsourcing would have a negative impact on the state’s economy, restricting economic and job growth and resulting in fewer jobs for workers in the state, the Chamber noted.

“The fact is that international trade and free commerce is a staple of the California economy and a key source of job creation,” said Jeanne Cain, Chamber senior vice president. “Foreign firms invest in California’s economy and create new jobs in exchange for California companies’ investments abroad. Efforts to prohibit worldwide outsourcing could end up costing many more jobs than they’re intended to protect.”

The Chamber’s remarks echoed panelists at the hearing who acknowledged that although legislators’ intentions were to protect and create jobs, the exact opposite would happen.

Chamber Board member Roger Baccigaluppi, chairman of RB International, an international marketing consulting company based in Sacramento, testified at the hearing. Baccigaluppi expressed concerns about the negative impact restrictions could have on international trade, which makes up 25 percent of California’s economy.

”If federal or state governments were to enact new restrictions that make it harder for U.S. companies to purchase services from foreign countries, our trading partners could respond by imposing mirror restrictions on their own companies,” testified Baccigaluppi. “The result would be that many individuals who work in U.S. companies that sell services such as financial, insurance, computer-related, publishing, telecom, construction and energy, and products such as almonds, walnuts, raisins, tractors, computers, etc., to other countries would lose their jobs.”

The Chamber has identified 10 bills that attempt, in one way, shape or form, to limit the free and open exchange of jobs and services and could have serious implications that would negatively impact our state’s economy, job creation and competitiveness.

The bills are: AB 664 (Correa; D-Santa Ana); AB 1829 (Liu; D-La Cañada/Flintridge); AB 2449 (Diaz; D-San Jose); AB 2715 (Reyes; D-Fresno); AB 3021 (Committee on Labor and Employment); SB 1451 (Figueroa; D-Fremont); SB 1452 (Figueroa; D-Fremont); SB 1453 (Figueroa; D-Fremont); SB 1492 (Dunn; D-Garden Grove); and SB 1638 (Romero; D-Los Angeles).

Cain suggested that efforts to create jobs in California and bolster the economy should begin with making California a more business-friendly state. “If their intent is to protect and create jobs in California, legislators should instead focus on policies that will make California a more competitive, job creating state. That includes repealing laws that are unique to California and are harming our economy, like the ‘sue your boss’ law, and enacting policies to fix California’s bankrupt unemployment insurance trust fund.”

For more information on these or other Chamber-opposed bills, visit the Government Relations page on our website at www.calchamber.com.