Michigan Aims To Stop Outsourcing

In a state synonymous with smokestacks, the loss of 170,000 manufacturing jobs in three years was a big blow, but as CBS News Correspondent Cynthia Bowers reports, when Michigan watched well over 100,000 white-collar jobs go overseas that was a back-breaker.

Desperate times that called for the governor to sign desperate measures ordering that Michigan based companies that employ American workers get first crack at the state's $1.5 billion worth of contracts.

"As a governor I can't do anything about international trade policy, but what I can say is that if you're going to compete for Michigan work, you should be here," says Michigan Gov. Jennifer Granholm.

Whether a company is providing napkins for the state cafeteria or helicopters for the highway patrol, Michigan's groundbreaking new policies also require every company competing for state contracts to fully disclose all of their offshore operations.

Nationally, 2.7 million jobs have been lost in the last three years, many outsourced to countries like Mexico and India -- where the average hourly wage is $2 or less, compared to more than $16 in the United States.

We call it "TINA" -- There Is No Alternative. They really have no choice but to outsource small portions of what they are doing to become competitive and safeguard that," says Peter Bendor, an analyst for Samuel Outsourcing.

In a presidential election year, protectionism is likely to be a populist theme, one that will no doubt get more play.

"It's something that looks good on paper," ABN AMRO North America's Chief Economist, Carl Tannenbaum. "It is one of those resonant issues and statements which can be dealt with in a very symbolic and surface way, but unfortunately underneath that surface things are a lot more complicated."

But in a state as hard hit as Michigan, the governor says you use whatever tool you can.

"If I'm grandstanding, then I'm grandstanding for the home team," says Granholm.

Whether that will translate to jobs in her home state remains to be seen.