Outsourcing resonates in Virginia race

The issue of jobs moving overseas remains hot for 'NASCAR dads' and software engineers in many states.

Next week's opening of a long-awaited day care center should be a big boon for this struggling Appalachian coal town, except for one thing: the new jobs it was built to support are already en route to India.

Travelocity, the sole tenant in the new industrial park along what was once the richest coal seam in southwest Virginia, announced in February that it planned to close its Clintwood call center by the end of 2004 to save costs. Locals took it hard.

"It's a heartbreaking thing to have happened to the people here," says town historian Mary Hylton. "Just when you think things are going to improve, this occurs."

For GOP House candidate Kevin Triplett - and many other challengers in economically troubled districts in the 2004 race - outsourcing is emerging as a potential flashpoint in campaign 2004. While the issue has dropped out of the media limelight lately, it continues to hold resonance in localized areas - and could help shape the outcome of a few key races.

"The main message of our campaign is economic development," says the Clintwood native. With the exit of Travelocity, "we've gone from 11 percent to 15 percent unemployment."

The former NASCAR executive is a long shot to unseat 11-term incumbent Rep. Rick Boucher (D) in Virginia's sprawling Ninth District. Mr. Boucher built his reputation on brokering the move of service jobs, including Travelocity, to the district.

Still, the area voted 55 percent for President Bush in 2000, and Congressional Quarterly recently ranked this contest as one of 10 House races where incumbents could be "vulnerable to an upset.".

Democrats predict that jobs and trade will emerge as strong issues in the general election. Key Senate races in Missouri, Pennsylvania, North Carolina, and South Carolina could also turn on the issue of job loss and outsourcing. "We see a lot of people talking about outsourcing, such as [Democratic Reps.] Joe Hoeffel in Pennsylvania and Nancy Farmer in Missouri," says Brad Woodhouse of the Democratic Senatorial Campaign Committee.

The clearest national race over jobs and trade is shaping up in South Carolina. Despite heavy losses in the textile industry, Rep. Jim DeMint (R) of South Carolina is staking his Senate campaign on a vigorous defense of free trade. "Only a very small percentage of jobs are outsourced overseas, and the US has no option but to compete with the rest of the world," he says.

Democratic challenger Inez Tenenbaum says there should be no more trade agreements until the US starts enforcing the ones it has now. She hopes to win support of that state's textile interests, which have traditionally backed Republicans.

Since 2001, some 300,000 US jobs have been lost due to offshoring, but as many as 12 million information-based jobs are at risk, according to the Progressive Policy Institute (PPI), a Washington think tank. At least 35 states have proposed laws to prevent state funds from going to companies doing work overseas.

"Even with strong job growth in the last few months, this issue is not going away, because it stems from the inexorable trend of US jobs - even middle- and higher-wage jobs - being opened up to international competition," says PPI's Robert Atkinson, in a report released Tuesday.

Moreover, the issue is hitting a deep concern among voters. "Some 21 percent of likely voters say they are afraid of losing their job in the next 12 months, and that increases to 25 percent for those earning more than $75,000 a year," says independent pollster John Zogby. While Americans are used to the loss of manufacturing jobs overseas, the outsourcing of service-sector jobs is affecting many who didn't think their paychecks were at risk.

But analysts say that the vast majority of House races are not competitive, including in many of the states most affected by outsourcing, such as Ohio. There, despite economic hardship, the advantage goes to incumbents. "These very large sweeping kinds of issues, like outsourcing, founder on the rock of incumbency," says Ross Baker, a political scientist at Rutgers University in New Brunswick, N.J.

Yet the issue could play larger in the presidential elections. Earlier this year, Mr. Bush backed off a claim by his chief economic adviser that outsourcing was an economic plus. He proposes job training to help keep jobs in America. Democratic hopeful John Kerry, who has dubbed outsourcers "Benedict Arnold CEOs," calls for ending tax credits for companies that send jobs overseas and, whenever possible, granting federal contracts to US workers.

"We have many fewer competitive races, which means that real issues can't get in there and get discussed. There are too many safe seats," says Kevin Kearns, president of the US Business & Industry Council, a lobbying group. "But Kerry could make it a bellwether ... in states like Ohio, Michigan, West Virginia, or Pennsylvania."

Meanwhile, Clintwood Mayor Don Baker says he's still looking for a way forward for his town. "Something has to happen at the federal level," he says. While outsourcing may be good for the country, it's "hard for people that are actually losing their jobs" to understand that.

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