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Congressman Jerry McNerney

Representing the 9th District of California

Rep. McNerney Calls for Greater Transparency to Stop Outsourcing of American Jobs Overseas

Oct 22, 2015
Press Release

Washington – Continuing his efforts to boost job growth locally and across the United States, Congressman Jerry McNerney (CA-09) today pushed forward a legislative package that targets existing tax loopholes that encourage shipping jobs overseas and provides greater transparency of corporations that regularly outsource American jobs. The legislation would also levy stronger penalties against businesses that falsify information on their outsourcing activity when applying for government contracts, and also for any illegal transactions businesses engage in that involve “tax havens” in foreign countries.

“We should not continue providing incentives that make it easy for American companies to ship jobs overseas at a time when good-paying jobs are still difficult to come by here at home, and hardworking people are still getting back on their feet. With this legislation, I want to shine a light on these abusive loopholes that result in corporations sending jobs abroad instead of making those jobs available locally to help build a strong middle class,” said Rep. McNerney. “When companies outsource jobs they are choosing to invest in the economies of other countries at the expense of the American worker, and this puts our economy at a competitive disadvantage.”

It is estimated that from 2000 to 2009, multinational corporations cut 2.9 million U.S. jobs while at the same time adding 2.4 million jobs outsourced abroad. Annual U.S. job loss due to offshoring is estimated to be around 300,000 jobs. That is roughly equivalent to the population of Stockton, CA.

The Stop Outsourcing and Create American Jobs Act would curb American job losses by cracking down on the tax loopholes that corporations with federal contracts employ to ship jobs abroad using taxpayer dollars. This legislation would direct the U.S. Secretary of the Treasury to establish a list of “corporate tax haven countries” and increase the civil and criminal penalties for corporations found guilty of any transactions involving a tax haven country, including fraud, false claims, and tax evasion.

The bill would also give federal agencies the authority to request the history of a corporation’s outsourcing practices when applying for government contracts. It would also allow the agencies to give preference for contracts to companies that have not outsourced jobs within the last year.

If a corporation provides false information on its outsourcing history during the application process, it would be subject to a fine, under this legislation, that could amount up to the value of the contract for which it is competing. The legislation would also ban corporations that provide falsified information from seeking new government contracts for two years.

Rep. McNerney introduced a similar version of the Stop Outsourcing and Create American Jobs Act during the previous Congress. The bill is co-sponsored by Rep. Barbara Lee (CA-13). It also has the support of the AFL-CIO.

“Keeping jobs in the U.S. should be among the highest priorities of our government, and federal procurement decisions should be tailored to achieve that goal. By discouraging the use of offshore tax havens and giving preference to firms that keep jobs in the U.S., the Stop Outsourcing and Create American Jobs Act will help more working families succeed in today’s economy,” said Bill Samuel, AFL-CIO Director of Government Affairs.

Rep. McNerney also introduced the Outsourcing Accountability Act. This legislation would require large corporations, with annual revenues of $ 1 billion or more, to disclose the number of its employees working domestically and the number of its employees working abroad.

Under this legislation, any company required to file reports with the Securities Exchange Commission (SEC) must annually disclose to its shareholders and the SEC, the number of employees working domestically compared to the number of employees that company has working outside the United States. The company must also report the percentage change from the previous year in number employees working domestically versus abroad.

“Many consumers want to buy products, goods, and services from companies that put American workers first, and I believe one way to encourage that investment in our economy is to make a company’s outsourcing behavior publicly available. The Outsourcing Accountability Act not only provides transparency for those consumers, it informs interested stakeholders about important business practices, and serves to make the public aware of the corporate tax loopholes that are costing Americans the jobs that provide a decent living wage,” said Rep. McNerney. 

The Outsourcing Accountability Act is also co-sponsored by Rep. Barbara Lee (CA-13) and is supported by the AFL-CIO.

“Too many U.S. companies claim to be ‘Made in America’ while continuing to ship jobs overseas hoping that no one will notice. By requiring greater disclosure of corporate outsourcing practices, the Outsourcing Accountability Act will help end this hypocrisy and force companies to live up to their commitment to keep jobs in America,” added Bill Samuel, AFL-CIO Director of Government Affairs.

Both bills will be referred to U.S. House Committees for further consideration.

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Rep. Jerry McNerney proudly serves the constituents of California’s 9th Congressional District that includes portions of San Joaquin, Contra Costa, and Sacramento Counties. For more information on Rep. McNerney’s work, follow him on Facebook and on Twitter @RepMcNerney.