Tim Bishop, Randy Altschuler battle over outsourcing

Randy Altschuler speaks during a debate with Tim Randy Altschuler speaks during a debate with Tim Bishop at the Fairfield at St. James community Monday. (Oct. 1, 2012) Photo Credit: Barry Sloan

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The television ads and news releases make the issue appear black and white.

Randy Altschuler, Republican candidate for Congress in the 1st District, outsourced American jobs, says incumbent Rep. Tim Bishop (D-Southampton).

That's a distortion, says the Altschuler campaign: the St. James Republican's former business support firm, OfficeTiger, only created jobs -- 3,250 -- overseas, but also more than 700 in the United States.

As the attacks and rejoinders intensify -- last month, a Democratic super PAC launched a new TV ad on the topic, joining two Bishop has put up -- outside experts say the issue is more nuanced than "outsourcer" versus "job creator," and hinges on perspective.

"You have to look at these companies in the larger context," said Cynthia Kroll, a senior regional economist at the University of California at Berkeley and co-author of the study "The New Wave of Outsourcing," from 2003, at OfficeTiger's height.

"You can say, yes, they created 700 jobs in the U.S., but they displaced what would have been [3,250] other jobs in the U.S.," Kroll said.

"Then again, maybe those [other jobs] wouldn't have been displaced, because the U.S. companies may not have bought that same service at the cost of a U.S. worker," she said. "There's just not an easy answer to all of this."

U.S.-based companies continue placing back-office operations in countries such as India, offering professional services at a fraction of what U.S. employees are paid.

And with stateside unemployment at 7.8 percent, the practice generates political battles between labor unions that oppose it and advocates who say it helps fuel the "global economy."

Altschuler and a partner founded OfficeTiger in 1999. When they sold the firm for $250 million in 2006, it had a stable of international clients to go with its 2,000 jobs in India, Sri Lanka and the Philippines, 1,250 in Europe and 750 in the United States.

 

Similar attacks in 2010Bishop's outsourcing attacks were relentless when Altschuler ran against him in 2010. Altschuler was forced to explain previous statements on the subject, including remarks he made in accepting a leadership award for his work with OfficeTiger in 2005. "It is so great being recognized for the innovation we bring to front-line, professional outsourced services," Altschuler had said.

Political experts said the attacks helped Bishop survive in a year when Republicans swept into power in the House. Bishop won by 593 votes.

This year, Altschuler is forcefully defending himself, saying Bishop had distorted OfficeTiger's mission and misrepresented its number of jobs. "OfficeTiger was a new company that created 4,000 jobs, period," Altschuler said in March. "We did not take 4,000 American jobs and move them overseas."

According to its website, OfficeTiger gave major companies a lower-cost alternative for back-office functions, including production of legal briefs and financial presentations. Altschuler said the company helped businesses increase profits and expand other stateside departments.

"OfficeTiger certainly provided opportunities for American companies to look for ways to improve their own business model," Altschuler campaign spokesman Chris Russell said. He acknowledged most jobs weren't in America, but "that doesn't mean Randy Altschuler was shipping jobs overseas."

 

Ads called 'best weapon'Bishop's ads in this campaign accuse OfficeTiger of profiting at the expense of U.S. workers. His campaign notes that Altschuler once said workers in India could handle white-collar functions at one-fifth of the cost of Americans.

"Randy was identified as an 'outsourcing pioneer,' accepted an outsourcing award and became a multimillionaire selling his outsourcing company," Bishop campaign spokesman Robert Pierce said. "If not for the millions he made outsourcing . . . he would never have even been a credible candidate."

Several political analysts said Bishop's outsourcing ads could again have an impact. They're running with no mention that Altschuler now chairs CloudBlue Technologies, an electronics recycler with all but four of 380 jobs in the United States.

"Fair or not, it's probably the best weapon Bishop has," Lawrence Levy, dean of the National Center for Suburban Studies at Hofstra University, said of the OfficeTiger attack ads. "Long Island is lagging in the economic recovery and a lot of people are hurting. Accurate or not, no doubt some believe their troubles are due to businesses sending jobs overseas."

Levy, however, cautioned that "the economy is a two-edged political sword," and "probably is the best weapon that Altschuler has as well."

Stanley Klein, an LIU Post political science professor and a Suffolk GOP committeeman, said outsourcing doesn't sit "very well with people who are looking for jobs, and for most people it strikes them as unfair to the United States."

The issue is tough for Altschuler to combat, Klein said. "He can try to change the subject, but he can't change the facts," he said.

Michel Janssen, chief research officer for the Hackett Group, a Florida global consulting firm that advises corporations on outsourcing, acknowledged the issue's crosscurrents, but said it's not clear-cut.

"Get past all the emotions of the debate, and if you're not globally competitive, you're out of business -- and you won't have any jobs," he said.

The Hackett Group says American companies have placed one in four finance jobs offshore, and Janssen acknowledged: "If you're an accounts payable clerk looking for a job right now, it's probably tough."With Yancey Roy

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