Proposal to retain jobs could do just the opposite

(March 28, 2008) If Connecticut companies are trying to compete globally, how would a proposal that discourages them from sourcing any of their work anywhere else than in the state help these businesses — or the state’s economy?

Lawmakers are considering a proposal that would require the governor to scrutinize all state contracts and identify if services are being provided outside of Connecticut or the United States. The governor would then report on the economic costs and benefits of these contracted services by Jan. 1, 2009.

HB-5112 seems harmless as a proposal that might help keep jobs in Connecticut. But it would only harm job creation by negatively targeting businesses that might source some work elsewhere in order to lower their costs and remain in Connecticut.

The proposal ignores that participating in a global economy often requires sourcing some work in locations where it will help businesses become more effective, efficient and competitive.

Creates a barrier
If enacted, HB-5112 could be seen as a barrier to Connecticut companies seeking to participate in the global marketplace. By frowning on companies’ competitive flexibility to choose the most cost-effective way to run their business, the state is making it even harder for them to stay and do business in Connecticut.

Furthermore, businesses outside of the state or the U.S. might reconsider bringing their investments and jobs here. Connecticut currently has more than 1,200 foreign-owned businesses that have chosen to locate here, create jobs and contribute state tax revenue.

Lawmakers should focus on the benefits of state businesses competing globally — and not try to discourage them.

For more information, contact CBIA’s Jesmin Basanti at 860-244-1929 or jesmin.basanti@cbia.com.