Government Affairs REPORT

Protectionist bills would harm Connecticut’s economy

(March 5, 2004) Several committees of the General Assembly are considering bills that would harm the state’s economy by imposing protectionist measures under the guise of protecting Connecticut jobs. Supposedly limiting the offshoring of jobs, these bills would in fact harm Connecticut jobs and the state’s ability to compete in the global economy.

Among other things, the proposals would prohibit the state from contracting with companies, or privatizing state services to companies, that perform any of the work overseas.

This would immediately hit many Connecticut companies that already have some of their operations in other parts of the world for both cost-savings and greater efficiency.
History has shown that protectionist policies simply don’t work — they invariably fail to produce the desired results and backfire by hurting jobs over the long term.

The global economy has brought Connecticut tremendous growth and even more potential. More than $8 billion of Connecticut-made products will be sold to over 200 countries around the world this year. In the last decade, each additional $1 billion of exports from Connecticut has meant the creation of 22,000 jobs here.

Trying to put a wall around the United States or around Connecticut would only be repeating mistakes that have been made by other countries in the past — but this time, hurting our employers and employees alike.

Our state benefits greatly from the fact that other nations outsource many of their jobs and government contracts to us. And Connecticut is the U.S. home to more than 1,200 foreign-owned companies — businesses that employ thousands of our residents and contribute powerfully to local and state tax bases.

Protectionist measures would send a poor message to these companies that have invested heavily here. Opportuni-ties could vanish if other nations retaliated against our protectionism — which is usually the reaction.

It’s not clear if Connecticut actually gains more jobs from other countries sending jobs and work here than we lose from sending jobs and work elsewhere. We do not know how many jobs these legislative proposals might save — or how many jobs they might cost us. Moving forward with legislation without adequate study could cause unforeseen, long-term harm to our economy.

If other nations passed similar protectionist legislation, our state would be hit hard.
CBIA urges the legislature to reject these bills and instead focus on policies to make our business climate more competitive and attractive to job-creating investments.

For more information or a list of these bills, contact Joe Brennan at brennanj@cbia.com or 860-244-1900.