Washington: As the outsourcing issue dominates the US Presidential election campaign, Senate Democrats have introduced a new legislation under which American employers would be required to warn their employees and affected communities before moving any jobs overseas.

The Jobs for America Act has been introduced in response to President George W Bush's annual economic report released Monday (Feb 09, 2004), which highlighted the benefits of sending jobs overseas.

Gregory Mankiw, the President's chief economic adviser defended outsourcing of jobs after the release of the report saying it was "probably a plus for the economy in the long run". However, he later apologised in a letter to the House of Representatives Speaker Dennis Hastert and regretted that his comments had been misinterpreted.

His comment has since then angered Democrats who seen the outsourcing issue as their main chance to win support away from Bush.

US employment is expected to be an important issue in the 2004 election with Democrats repeatedly noting that the American economy has lost more than two million jobs since 2001 and that employment growth has been slow despite other signs of economic recovery.

Dismissing Mankiw's theory as "Alice in Wonderland economics", Senate Minorities leader Tom Daschle introduced the bill on Thursday (Feb 12, 2004). It requires any company that plans to lay off 15 or more workers and send those jobs overseas to disclose how many jobs are affected, where the jobs are going and why they are being offshored.

Apart from giving workers three months notice, the companies will be required to notify Federal and State agencies responsible for helping laid off workers. The bill also calls on Department of Labour to compile statistics of offshored jobs and report annually to US Congress. Among the co-sponsors of the Act are Senators Edward Kennedy, Hillary Rodham Clinton and Tom Harkin.

The leading candidate for Democrat nomination John Kerry has also attacked Bush administration's call for outsourcing saying, "They have delivered a double blow to America's workers, three million jobs destroyed on their watch and now they want to export more of our jobs overseas."

President Bush and Chairman of the Federal Reserve assured the American public that they would keep their jobs in the 21st century if they get smarter with better education.

"There are people looking for work because jobs have gone overseas. And we need to act in this country. We need to act to make sure there are more jobs at home, and people are more likely to retain a job," President Bush said during an appearance with students and educators in Pennsylvania on Thursday.

"The jobs of the 21st century are going to require a lot of smarts," Bush said. In a separate appearance, Federal Reserve Chairman Alan Greenspan took up the issue of US job losses from outsourcing, telling senators that better education will be crucial to helping workers find and retain good jobs.

However, Democratic Congressman from New York Charles Schumer suggested it won't work because Indian and Chinese workers are as well educated as Americans and have the advantage of lower wages.