Donald Trump in Debate with Himself over Outsourcing

April 26, 2016 4:16 pm | Updated 6 months ago.

In his announcement speech, Donald Trump vowed, “Greatest jobs president that God ever created.”  His prescription – get the jobs back to the United States from destinations across the borders where the US companies outsource work to remain competitive with a special emphasis on China and Mexico.

There was a time when Donald Trump was the outsourcing poster boy, quoting compelling statistics and arguments on why outsourcing was a necessity. However in recent times, we see him changing tracks and become a sworn critique of outsourcing, in his run for the presidency of the United States.

A 2005 post in the Trump’s blog on the website of his now-defunct Trump University, he wrote a post in defense of outsourcing titled, “Outsourcing Creates Jobs in the Long Run.”

“We hear terrible things about outsourcing jobs — how sending work outside of our companies is contributing to the demise of American businesses,” penned Trump. “But in this instance, I have to take the unpopular stance that it is not always a terrible thing.”

“I understand that outsourcing means that employees lose jobs,” argued Trump. “Because work is often outsourced to other countries, it means Americans lose jobs. In other cases, nonunion employees get the work. Losing jobs is never a good thing, but we have to look at the bigger picture.”

Attesting academic rigour behind his arguments, Trump continued “Last year, Nobel Prize-winning economist Dr. Lawrence R. Klein, the founder of Wharton Econometric Forecasting Associates, co-authored a study that showed how global outsourcing actually creates more jobs and increases wages, at least for IT workers,” wrote Trump. “The study found that outsourcing helped companies be more competitive and more productive. That means they make more money, which means they funnel more into the economy, thereby, creating more jobs,” he asserted.

Labeling outsourcing as inevitable Trump continued, “I know that doesn’t make it any easier for people whose jobs have been outsourced overseas, but if a company’s only means of survival is by farming jobs outside its walls, then sometimes it’s a necessary step”. He warned, “The other option might be to close its doors for good.”

In public policy, a researcher testing a research question looks at two propositions: the null hypothesis (or H0 for short), and the alternative (H1). The alternative hypothesis is what we hope to support. The null hypothesis, in contrast, is presumed to be true, until the data provide sufficient evidence that it is not.  Going by 2005 assertion of Donald Trump, the hypothesis construction would be – H0: Outsourcing does not impact domestic employment, H1: Outsourcing Impacts domestic employment.

Most of the research in outsourcing concludes that there is no indication that trade or outsourcing leads to higher unemployment (or lower employment). HO hypothesis appears to hold true as of now.

In politics, however, there is no null hypothesis.