Outsourcing Accountability Act of 2019
Floor Speech
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Ms. WATERS. 3624, and to insert extraneous material thereon.
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Ms. WATERS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I rise in support of H.R. 3624, the Outsourcing Accountability Act of 2019 crafted by Representative Axne from Iowa, a new Member to Congress and the Financial Services Committee.
The Outsourcing Accountability Act of 2019 protects American workers by shining a light on companies that are shipping jobs overseas.
Although public companies are required to disclose their total number of employees, there is currently no requirement that they disclose where those employees are geographically based. This allows companies to quietly ship jobs overseas and makes it difficult for investors to know if the companies they are investing in are creating and protecting American jobs.
Moreover, voluntary disclosure of outsourcing data has declined in recent decades. According to the AFL-CIO: ``. . . multinational companies have increasingly focused job creation in non-U.S. markets and would prefer not to disclose numbers that could lead to reputational risks.''
As a result of the lack of disclosure, some companies that are failing to invest in American workers escape accountability. The limited information the public does have about companies' outsourcing and offshoring usually comes from the news media.
The data that we do have shows that the U.S. is losing jobs to trade. According to the Economic Policy Institute, the United States has lost more than 3 million American jobs to trade with China in the last 20 years. Since 1975, more than 5 million Americans have been certified for Trade Adjustment Assistance after losing wages, hours, or their employment because of trade.
President Trump's 2017 tax scam has also worsened matters by essentially incentivizing certain manufacturers to move entire production lines overseas.
By requiring public companies to disclose the locations of their workforces, the Outsourcing Accountability Act provides investors with the information they need on which companies are investing in the American economy and will incentivize companies to invest in American workers.
With the passage of this bill into law, public companies would no longer be able to ship jobs overseas under the cover of darkness.
I commend Representative Axne for introducing this bill that creates transparency and benefits American workers and urge adoption of H.R. 3624.
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Ms. WATERS. Mr. Chairman, I yield 5 minutes to the gentlewoman from Iowa (Mrs. Axne), who is the sponsor of the bill.
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Ms. WATERS. Mr. Chairman, I yield 3 minutes to the gentlewoman from New York (Mrs. Carolyn B. Maloney), who is the chairwoman of the Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets.
Mrs. CAROLYN B. MALONEY of New York. Mr. Chairman, I thank the gentlewoman for her support on this bill and for her leadership on the Financial Services Committee.
I rise in strong support of the bill to protect American workers from outsourcing, H.R. 3624, the Outsourcing Accountability Act of 2019. And I congratulate my new colleague and my new friend from the great State of Iowa, Cindy Axne, for her hard work on this important bill that will help American workers and save American jobs.
This bill would require companies to disclose in their annual report the total number of employees they employ in each State and each foreign country. It would also require companies to disclose how those numbers have changed from the previous year, which is critically important because it will allow investors and the public to monitor which companies are sending U.S. jobs overseas and also to see which companies are bringing jobs back to the United States and employing Americans.
When companies outsource more of their jobs to other countries, sometimes that lowers a company's costs, but it also exposes the company to reputational risk and increased operational risk. If more of the company's workforce is located overseas, then the company is more exposed to political unrest or trade disruptions, which we have recently seen around the world.
It also makes it more difficult for companies to train workers who are located halfway across the globe and to oversee their workforce and ensure robust compliance with all the necessary regulatory requirements. It opens the company up to potential scandals and fines, which, at the end of the day, harms investors and harms the companies.
These risks are definitely material to investors, and they need to know about them.
The bill would fix these problems and would hold companies that are outsourcing U.S. jobs accountable for the decisions they are making. This bill helps the American worker. It is just plain common sense, and it does not cost the taxpayer anything. It is a win-win-win in so many areas.
Mr. Chairman, I urge my colleagues to support this worker protection bill.
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Ms. WATERS. Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. McNerney).
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Ms. WATERS. Mr. Chairman, I yield myself such time as I may consume.
The Outsourcing Accountability Act of 2019 is a commonsense bill that is supported by consumer advocacy organizations, like Public Citizen, the labor representatives from the AFL-CIO, Communications Workers of America, the United Automobile Workers, and the United Steelworkers.
According to the Communications Workers of America: ``This key piece of legislation would greatly help working families and CWA fully supports the bill's passage. This is a vital effort to guarantee that companies are required, by law, to disclose the magnitude to which they outsource American jobs and exploit low-cost foreign labor.''
According to the AFL-CIO, the offshoring disclosure required by H.R. 3624 would ``help investors analyze companies' strategic plans, exposures to geopolitical risk and risk from extreme weather events. From a public policy perspective, such disclosure will also allow the public to see the effect of the corporate tax cut on encouraging offshoring.''
Mr. Chairman, I include in the Record a letter from the Communications Workers of America in support of H.R. 3624. Communications Workers of America, Legislative Department, October 15, 2019. Hon. Cindy Axne, Member of Congress, Washington, DC.
Dear Representative Axne: On behalf of the officers and 700,000 members of the Communications Workers of America ( CWA), I am writing to thank you for introducing H.R. 3624, the Outsourcing Accountability Act of 2019. This key piece of legislation would greatly help working families and CWA fully supports the bill's passage. This is a vital effort to guarantee that companies are required, by law, to disclose the magnitude to which they outsource American jobs and exploit low-cost, foreign labor.
As you know, under existing law, publicly traded corporations are not required to publicly list where their employees are located. This lack of disclosure makes it much more difficult to hold corporations that move jobs overseas accountable. The Outsourcing Accountability Act remedies this problem by requiring companies to disclose the total number of employees that they have by state and country, and the percentage change from the previous year.
Without this accountability mechanism, corporations will continue to attempt to deceive workers and the American public when they outsource jobs. A prime example of this problem occurred when Wells Fargo announced a massive layoff of over 26,500 employees in 2018. While the company proclaimed the layoff was due to changes in customer preferences and publicly denied that work was being offshored, several investigations by the Department of Labor revealed that many people lost their jobs because Wells Fargo chose to expand their operations overseas. In fact, the company is opening a call center in the Philippines where they will employ over 7,000 workers. This same dynamic occurs frequently across industries.
CWA believes this bill adds imperative transparency that will disincentive the practice of corporations outsourcing jobs. Furthermore, it will help ensure that workers affected by outsourcing are able to access their Trade Adjustment Assistance benefits by demonstrating more clearly that offshoring played a role in their job loss.
We are very grateful for your efforts on this bill and thank you for your commitment to standing up for American workers with the introduction of H.R. 3624. We look forward to working with you on this and other issues of importance to working people in the future. Sincerely, Shane Larson,
Senior Director, Government Affairs and Policy, Communications Workers of America (CWA).
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Ms. WATERS. Mr. Chair,
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Ms. WATERS. Mr. Chairman, I am prepared to close.
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Ms. WATERS. Mr. Chair, may I inquire how much time I have remaining.
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Ms. WATERS. Mr. Chairman, I yield myself the balance of my time.
Mr. Chairman, I have sat here and listened to my colleagues on the opposite side of the aisle attempt to explain why it is they are opposed to this bill and what this bill is attempting to do to create transparency in American companies by simply asking them to disclose the number of jobs that they are exporting overseas. I don't understand what their argument is.
I have heard from both sides of the aisle, for years, that one of our number one priorities is jobs: job creation and job retention. I have heard from both sides of the aisle that we must do everything that we can to stop American corporations from exporting our jobs offshore.
I have heard Members from both sides of the aisle take to the floor of the House of Representatives and talk about how we must stop, how we must do everything that we possibly can to ensure that we are in no way supporting or incentivizing our companies to export our jobs overseas.
We heard the gentlewoman from Iowa (Mrs. Axne), author of this bill, who talked about what happened in her district with Wells Fargo. We heard her explain how these people, these employees are hurting, and many of them just feel it is absolutely unfair for our companies who got big tax breaks to be able to export our jobs overseas in search of cheap labor, undermining the labor force here in America.
I don't know how they justify that.
And I heard the ranking member of this committee keep talking about shaming the companies. I don't know who he is trying to protect. I don't know where he gets this language from, ``shaming the companies.''
But if that is what he wants to use, if that is what he wants to accuse me of--I am sure he is not accusing the author of this bill of shaming American companies. But if you want to accuse me of that, you might be able to do so.
And let me just say this: You might be able to say that I am throwing a little shade on you also, because if, in fact, you are defending the actions of American companies that are taking your constituents' jobs out of your district, offshore, and you can defend that, then there is something wrong with your reasoning.
And I don't know if it is shaming or shading or whatever it is, I am opposed to it. Most of the Members of this House of Representatives are opposed to it.
And this legislator, a new legislator, who came to the Congress of the United States probably wondered why we hadn't done something about this sooner. I am so pleased that she had the courage, the wisdom, and the insight to challenge us all and to say this has got to stop.
And you are saying this bill does nothing? Are you saying that information is no good? Are you saying that somehow knowing this, understanding this, we wouldn't be able to do something about it?
Well, let me just tell you, I think you are wrong. I think you are absolutely wrong.
When this information is revealed, when this information is unfolded, when it is made evident that these companies are doing this, then I think we have more than a few Members who will rise to the occasion to do everything possible to stop shipping American jobs from our districts to foreign countries for cheap labor.
Mr. Chairman, I yield back the balance of my time.
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Ms. WATERS. Mr. Chair, I claim the time in opposition to the amendment.
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Ms. WATERS. Mr. Chair, I strongly oppose Representative Huizenga's amendment, which would effectively gut H.R. 3624 by exempting the vast majority of public companies from the outsourcing disclosure.
The amendment does this indirectly by exempting companies that have to comply with SEC rules requiring disclosure of the pay ratio between the CEO's compensation and that of its median employee or rules requiring disclosures relating to conflict minerals. However, all public companies must comply with those rules, with some narrow exemptions.
The CEO pay ratio and conflict minerals disclosures have nothing to do with the new requirement to disclose how many jobs are being outsourced.
Taken together with the limited exemption for newly public companies already in H.R. 3624, the amendment would limit the bill's outsourcing disclosures to small reporting companies, foreign private issuers, and certain registered investment companies.
What my Republican colleagues do not seem to understand is that investors do care about all of these types of disclosures. They know that when a CEO makes significant multiples of the median employee, the performance of the company is hurt. Investors also know that, if a company sources its minerals to conflict zones, it faces a much higher risk than a company with a stable source of resources.
Likewise, investors also want to know whether a company is creating jobs in the United States or overseas.
By proposing a huge expansion of exemptions, Representative Huizenga's amendment would effectively negate the bill and allow companies to continue to, quietly and secretly, ship American jobs overseas.
Let me just add to these comments, in particular for all of the new Members of Congress: Anytime any company is shipping jobs out of your district, no matter where they are going, you raise questions. You ask why they are doing that. Don't be ashamed to do that. Don't think that something is wrong with doing that.
You were elected to represent the people in your district, and Mr. Huizenga would have you believe that, if jobs are being taken from your State to another State, you are supposed to be quiet because something is wrong with that.
I don't care whether it is from State to State or overseas or what have you. Representatives who were sent here to speak for their constituents should be concerned about that, they should raise the questions, and they should be involved with everything they can do to preserve those jobs.
Mr. Chair,
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Ms. WATERS. Mr. Chair, I yield the balance of my time to the gentlewoman from Iowa (Mrs. Axne), the sponsor of this important legislation.
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Ms. WATERS. Mr. Chair, I yield back the balance of my time.
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Ms. WATERS. Mr. Chairman, I claim time in opposition.
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Ms. WATERS. Mr. Chairman, let me say to my colleague from Arkansas on the opposite side of the aisle that the need to be concerned about regulations relative to companies that are shipping jobs overseas is something I don't understand. I don't understand why the Members on the opposite side of the aisle could take this precious time to come here in defense of companies that would ship our American jobs overseas for cheap labor.
There is no excuse. There is no reason. There is no reason why our colleagues who come here to represent constituents, many of whom are still looking for jobs, and those who get laid off because their companies have taken their jobs and shipped them overseas, would come here and defend some company because they believe that we are being too tough on them, that we are overregulating them.
Well, I don't understand it, and there is nothing they could say or do to help me understand that.
I strongly oppose Representative Hill's amendment because it would effectively negate the purpose of H.R. 3624 by allowing companies to opt out of this disclosure if they believe that the information is not ``material'' information for investors.
As we all know, in practice, companies have interpreted ``material'' only to include information on issues that have a current and easily quantifiable impact. This is exactly what the multinational companies that have been shipping American jobs overseas want, to hide what they are doing.
As the AFL-CIO noted before an Investor Protection, Entrepreneurship, and Capital Markets Subcommittee hearing in May, multinational companies ``have increasingly focused job creation in non-U.S. markets and would prefer not to disclose numbers that would lead to reputational risks.''
We must stand with American workers and address this informational barrier to help investors, the public, and policymakers understand the true magnitude of the problem. So I urge my colleagues to vote ``no'' on this amendment.
Mr. Chairman,
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Ms. WATERS. Mr. Chairman, I would ask, does the gentleman have any more speakers?
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Ms. WATERS. Mr. Chairman,
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Ms. WATERS. Mr. Chairman, I would say to the gentleman from Arkansas to use your time to deal with the burden that you claim multinationals have just for doing this reporting. We will use our time to support the workers and the people of this country.
Mr. Chairman, I yield the balance of my time to the gentlewoman from Iowa (Mrs. Axne), the sponsor of this important legislation.
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Ms. WATERS. Mr. Chairman, I would like to take this moment to thank my colleague, a new Member of the Congress of the United States who serves on the Financial Services Committee, for introducing, supporting, and working for this legislation.
I urge all of my colleagues to vote ``no'' on this amendment.
I yield back the balance of my time.
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Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
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