McCord’s outsourcing record leaves him walking a thin line

By Eric Boehm | PA Independent

Rob McCord, Pennsylvania’s state treasurer and a Democratic candidate for governor, is defending his former role as the leader of a business group that helped companies outsource jobs during the 1990s and early 2000s.

It leaves McCord walking a thin line.

His candidacy has attracted several major endorsements from labor unions. He’s backed a $10.70 minimum wage for Pennsylvania workers, despite his earlier support for outsourcing. He says the outsourcing was limited to certain sectors, did not hurt employment in Pennsylvania and does not relate to his current call for higher wages for workers, even as opponents are jumping at the chance to label him a “job-slayer.”

Before he was elected treasurer in 2008, McCord was the head of the Eastern Technology Council, an industry trade group he helped found in 1996. During McCord’s time leading the ETC, the organization partnered with The Judge Group, a business consulting firm, to run a series of seminars advising companies on how to move jobs overseas.

For example, one 2005 seminar promoted the “high quality, low-cost talent pool” available in Panama.

McCord’s campaign says the minimum-wage effort and the outsourcing are distinct and separate issues.

“Part of what the Eastern Technology Council did was work with local, Pennsylvania companies that were seeking to expand their reach globally,” said Mark Nevins, a spokesman for McCord’s campaign. “There’s simply no connection between that small part of what they did and Rob’s plan to increase the minimum wage in a way that would lift more families out of poverty more quickly.”

But during a visit to the Harrisburg Patriot-News editorial board last week, McCord was asked about his history with the ETC and how that fits with his campaign trail message about fighting for Pennsylvania workers and families.

He parried the question by talking about the economic environment of the 1990s.

“I thought of the Judge Group at the time as being involved in IT sourcing in general — information technology sourcing. And in the ’90s, in particular, most places didn’t have IT offices and they were going through tons of stuff,” McCord said in the meeting. “The raw (spending) in India because of the looming ‘Y2K problem’ was overwhelming.

“At the time, I didn’t think of myself as hurting job creation.”

But McCord’s organization was advocating actively for outsourcing well after 2000.

The Panama example took place in 2005. The ETC promoted another seminar in 2005 on the successes of outsourcing, and the ETC was involved in conferences or seminars about outsourcing in 2001 and 2004.

But does it matter?

Back in 2005, the Eastern Technology Fund’s promotion of Panama as a location for business investment reflected the complex reasons companies choose to invest in jobs in other countries. On top of the “low-cost talent pool,” the group highlighted Panama’s “set of long-established R&D centers, mostly specialized in tropical drug research,” along with drug discovery programs financed by the National Institute of Health and the National Science Foundation.

McCord is right to draw a distinction between minimum wage jobs and IT jobs or research jobs.

Certainly it’s not possible for McDonald’s to outsource jobs if the minimum wage in Pennsylvania is raised to $10.70 per hour, and the research is mixed on whether high wages are a primary reason companies seek to outsource at all — other issues, such as access to raw materials, being close to major markets and seeking workforces with specific skills tend to play a role, too.

McCord’s campaign has also slammed Gov. Tom Corbett over his effort to privatize the state lottery and sell it to a British firm, Camelot LLC. McCord’s campaign ads have put the lottery issue front and center.

Again, his campaign says there’s a distinction between his objections to the privatization — which were based on the legality of the move and on the fact that there was only one bidder, rather than the fact that the ownership would have been outsourced to a foreign company.

“That’s not apples and oranges. That’s apples and monkeys. Not even the same species,” Nevins said.

AFSCME Council 13, the labor union representing state employees including lottery employees, has endorsed McCord. The union has made the prospective outsourcing of the lottery — and the jobs that go with it — their primary objection to the effort.

And they’re hardly the only ones to back the treasurer. McCord brags about having endorsements from unions representing 450,000 workers in the state, which he says shows they have “audited his career” and judged him to be pro-worker.

Ultimately, voters will have to decide if these are distinctions without a difference or legitimate explanations for how to square McCord’s history with his current political positions.

Corbett’s campaign has made their decision.

“Pennsylvanians know the Democratic candidates have never seen a job-killing tax hike they didn’t like, and now they know where Rob McCord, the jobs-slayer, sharpened his axe shipping jobs overseas,” said Billy Pitman, spokesman for Corbett’s campaign.

When it comes to progressive policies like raising the minimum wage, McCord told the Patriot-News he would have a progressive direction to his policies, but with an eye toward business.

“I am one of those Democrats who says you can’t love the jobs and hate the employers,” McCord said. “As we embrace these progressive policies, we have to check on the possible effects when it comes to job creation and attracting businesses.”

Boehm is a reporter for PA Independent and can be reached at Eric@PAIndependent.com. Follow @PAIndependent on Twitter for more.