California signs a deal with a company that specializes in exporting jobs to cheap overseas labor markets.

Published on

Critics say state-funded jobs could soon be shipped overseas.


The state of California has signed a deal with a well-known outsourcing company. The state faces a continuing budget crisis and Governor Schwarzenegger is looking for ways to cut cost. One solution could be the exporting of taxpayer funded government jobs to cheap foreign labor markets. Casey Wian reports from Los Angeles.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Newly inaugurated California Governor Arnold Schwarzenegger made this promise…

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I will not rest until California is a competitive job-creating machine.

WIAN: But was he talking about a job-creating machine for the people of India? That may be the effect now that the governor has signed a deal with a Canadian-owned company specializing in exporting jobs to cheap overseas labor markets.

California spends nearly $5 billion a year buying goods and service. Montreal-based CGIAMS will provide what it calls strategic sourcing analysis to streamline that purchasing power.

Some state lawmakers are worried the deal will also lead to taxpayer-funded jobs being sent overseas.

SEN. LIZ FIGUEROA (D), CALIFORNIA STATE SENATE: We’re concerned about putting tax revenues back into the state’s economy when we’re having such difficulty in balancing a budget and budget constraints. We want to make sure that the tax money that is saved or generated here in California goes to California workers.

WIAN: CGI’s Web site trumpets its pioneering global delivery centers in Mumbai and Bangalore, India. Still California officials say it’s too early to tell if outsourcing will be included in the company’s recommendations to the state.

RON JOSEPH, CA. DEPT OF GENERAL SERVICES: At this time, there is no given that any outsourcing or offshoring would occur out of these proposals. Ultimately, the state has the authority and the final decision of how to move forward with the proposals that AMS puts on the table.

WIAN: The governor’s office cites examples of potential savings such as consolidating the purchase of tires for the California Highway Patrol and other state agencies under one contract. CGIAMS will receive a percentage of any savings it recommends under its three-year contract with the state.

JAMIE COURT, AUTHOR, “CORPORATEERING”: The state of California, 35 million people, should not be legitimatizing the use of outsourcers and the exporting of American jobs elsewhere. I’m afraid the only reason we are is because the governor of California is acting a lot more like a CEO of California, and he’s learned this tactic clearly from many of the very large Fortune 500 companies that he’s been fund-raising among.

WIAN: Meanwhile, some state lawmakers are sponsoring a bill that would require any taxpayer-funded jobs stay in California. Casey Wian, CNN, Los Angeles.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Releases

In The News

Latest Report

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Releases