Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

S. 2143. A bill to extend trade adjustment assistance to service workers; to the Committee on Finance.

Mr. DURBIN. Mr. President, today, I am introducing the Service Workers Fairness Act to provide aid for American workers facing a disturbing new trend: the offshore outsourcing of service jobs.

Congress first established Trade Adjustment Assistance (TAA) in 1962, in recognition that international trade can harm our workers. The program was overhauled in 1974, and since then, it has offered extended unemployment compensation benefits and job training for workers who lose their manufacturing jobs due to import competition.

Over the past decade, Congress has shown its willingness to adapt to increasing globalization by modernizing TAA. For example, in 1993, with the adoption of the North American Free Trade Agreement, we added a provision to offer those same unemployment and job training benefits to workers whose manufacturing jobs were relocated to Canada or Mexico. Most recently, when the program was reauthorized in 2002, we expanded eligibility once again. The program now includes workers whose manufacturing jobs have been relocated to certain countries other than Canada or Mexico. It also now provides assistance to certain secondary workers who have lost their manufacturing jobs as suppliers or downstream producers to firms that have been affected by trade or plant relocation.

Despite these changes, one factor has remained constant: Trade Adjustment Assistance is only available to workers in the manufacturing sector. If a service sector employee's job has been outsourced to a foreign country, he or she is not eligible for TAA because the performance of services is not considered production of an "article," as required by the law.

I can understand why the law was written that way-until recently, we believed that our service jobs were not put at risk by international trade. But now, unfortunately, we know this is no longer the case. Hundreds of thousands of service sector jobs already have been outsourced to other countries, including China and India. A report by Forrester Research predicts that 3.3 million service jobs will be outsourced by the year 2015-and some economists believe that forecast is conservative. Last fall, the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, estimated that more than 14 million service jobs are "at risk to outsourcing"-that is 11 percent of all jobs.

That is the outer limit of service jobs at risk, but it demonstrates that this issue will reach far beyond the software programmers and call centers that are receiving attention today. The Fisher Center report notes that the jobs being created in India and elsewhere also include the following service sectors: geographic information systems services for insurance companies; stock market research for financial firms; medical transcription services; legal online database research; data analysis for consulting firms; and payroll and other back-office related activities.

In fact, the offshore outsourcing of service jobs likely will grow at a much faster rate than the manufacturing outsourcing we have witnessed over the past two decades because there is an enormous cost differential in the wages of well-educated workers here and abroad. For example, the hourly wage for telephone operators in the United States is $12.57, while it is less than $1.00 in India. The hourly wage for legal assistants and paralegals in the United States is $17.86, compared to $6.00 to $8.00 in India. Accountants in the United States earn $23.35 per hour, while those in India earn $6.00 to $15.00 per hour. Finally, financial researchers and analysts in the United States earn $33.00 to $35.00 per hour, while those in India earn only $6.00 to $15.00 per hour.

The offshore outsourcing of service jobs already is having an impact on our economy. For example, it may be one reason that the recent increase in the unemployment rate is larger for highly-educated workers. From 2000 to 2003, total unemployment for workers with at least a bachelor's degree increased by 95 percent, compared to a 40 percent increase for workers with a high school diploma or less. Statistics for long-term unemployment-representing workers who have been unemployed for more than six months-are similar. From 2000 to 2003, long term unemployment for workers with at least a bachelor's degree increased by 299 percent, compared to an increase of 156 percent for workers with a high school diploma or less.

The offshore outsourcing of service jobs also may help explain why the few jobs that have been created since the recession officially ended in November 2001 have been primarily in low-paying sectors.

The question before us today is: How should Congress respond to this new facet of globalization and how can we aid these hundreds of thousands-and eventually millions-of service workers whose jobs have been outsourced?

Although there are broader trade issues that we should examine over time, there is one thing we can and should do now, and that is extend Trade Adjustment Assistance to these service employees. The service-providing sector provides more than 86 million jobs and accounts for more than half of our total GDP. We must extend the same helping hand to these men and women when their jobs are outsourced as we do to workers in the manufacturing sector.

Trade Adjustment Assistance not only provides additional unemployment compensation benefits. Just as importantly, it provides training to help workers find jobs at a similar or higher skill level, including classroom training, on-the-job training, and customized employer-based training. TAA also provides reemployment services, including employment counseling, case assessment, job development, and supportive services.

The bill I am introducing today, the Service Workers Fairness Act, would provide TAA eligibility to laid-off service workers whose firm shifts the work for the same or directly competitive services to a foreign country. It also would cover contract service workers whose contracts have been shifted overseas. Finally, my bill would extend the current provisions for adversely affected secondary workers to those who provide services.

Last week, Federal Reserve Chairman Alan Greenspan noted that "rigorous education and ongoing training" are critical in ensuring that as many Americans as possible can benefit from increased globalization.

My bill would provide this education and training to service workers whose jobs are outsourced abroad. I urge my colleagues to join me in support of this important legislation.