Governor targets outsourcing of jobs
Romney offers $29m initiative
Governor Mitt Romney, under mounting political pressure as Massachusetts continues to shed jobs, took aim at a popular target yesterday by proposing a $29 million plan to curb the "outsourcing" of jobs out of state.
Under Romney's three-pronged plan, which he unveiled at a Hyannis plastics company, the state would give more than $8 million in capital loans to Bay State companies looking to stay or expand here; provide $10 million in grants to companies that create 250 or more jobs in-state; and distribute a total of $11 million, in $2,000 grants, to companies that hire longtime Massachusetts workers who lost their jobs more than a year ago.
"The reality of today's business climate is that a growing number of companies are sending their best jobs out of state," Romney said. "Whether it's the loss of one job or 100,000 jobs, it's a very real issue for all of us. These common sense initiatives will help slow outsourcing and speed up insourcing."
Several economists cast doubt on the efficacy of Romney's "anti-outsourcing initiative," at least $12.5 million of which would come from a program the governor tried to scale back at the end of last year.
"To the extent that these initiatives have any kind of merit, you can expect them to be countered elsewhere by other states," said Wayne Ayers, chief economist at
In a statement released yesterday, Associated Industries of Massachusetts, the state's largest business group, praised the governor for "a positive approach to the threat that international competition for good jobs poses to our state's employment base."
About 50,000 Massachusetts jobs have disappeared since Romney took office, creating a political problem for the governor, who is a former business executive who pledged to make job creation a top priority. Massachusetts shed 9,500 jobs in February and has lost a total of 200,000 since January 2001.
His initiative yesterday is his second attempt to cite outsourcing -- a word that has become hot in the national presidential campaign -- for the state's jobless woes. Several weeks ago, Romney linked the outsourcing of Massachusetts jobs to the state's relatively high unemployment insurance costs, urging lawmakers to approve his plan to pay out benefits for fewer weeks and extend the period employees must work to qualify for unemployment checks.
Yesterday, state Democratic chairman Philip W. Johnston described the governor as "the Paris Hilton of state government. He looks good on the outside but there isn't a whole lot going on on the inside."
"He is scurrying to play catch-up because of these horrific unemployment numbers," Johnston said. "We're triple the national average in job loss since Mitt Romney took over. If that's not a crisis, I don't know what is."
Representative Peter J. Larkin, the Pittsfield Democrat who shepherded legislators' $100 million economic stimulus package through the House late last year, said Romney's plan was "clearly created in the PR department for the governor to respond to outsourcing as a national issue and the joblessness in Massachusetts."
Larkin noted that Romney vetoed $12.5 million from a fund he now hopes to tap for his anti-outsourcing plan. The Legislature overrode his veto.
"These things are all in contradiction to what he has espoused until now," said Larkin, predicting that his legislative colleagues would view Romney's ideas with skepticism. "It's just incredible. I'd welcome him to the fray, except that we've been waiting for the governor to engage in this process since he was elected."
Sarah D'Souza, a Romney spokeswoman, said that last November the governor vetoed $12.5 million of the $25 million the Legislature wanted to put in the state's Emerging Technology Fund because he didn't think the money would be put to good use. In contrast, she said, the governor's new proposal to funnel $10 million of the money to cutting-edge companies that create 250 or more jobs makes sense.
Romney wants some of the $10 million from the Emerging Technology Fund to be handed out in the form of low-interest loans that companies could use to purchase capital equipment. He wants to restructure the dwindling Economic Stabilization Trust to provide more than $8 million in working capital loans to Massachusetts companies to persuade them to stay and grow here. And he is proposing using $11 million from the state's Workforce Training Fund to provide $2,000 grants to companies that hire workers who have been out of work for at least a year and have earned wages in Massachusetts for at least four years. Romney is not proposing any new spending.
In addition to the stimulus plan approved last year, Johnston said the Democrats would favor a job creation strategy that relies more on worker training, and hope to pump more money into higher education to ensure that Massachusetts workers have the skills necessary to work in the few fields that need workers, such as health care.
But Paul Harrington, associate director at the Center for Labor Market Studies at Northeastern University, said the Democrats' approach isn't likely to yield dramatic results, either. "The fundamental problem in Massachusetts is a job deficit. We just don't have enough jobs -- period," Harrington said. "Workforce training can be part of that strategy, but it can't be the only part."
Harrington noted that outsourcing is a global phenomenon and that it is difficult to gauge its impact on job losses because US companies do not have to disclose how many jobs they transfer overseas. Because outsourcing is hard to get a handle on, he said, "it would be pretty tough to put in effect a set of policies to slow it down."
