Yes, and that's what people like Ross Perot were fighting NAFTA for. It's going over to India and China in the form of H1Bs and L1 employees. There are all kinds of programs trying to take down our international barriers. These people on this board won't understand that sort of argument because most don't work in the field and plain old don't care mainly because they're out of touch. How many engineer and scientist lobbyists do you see? Small percentage. Hell how many engineers are in any form of government? (I have no idea but it's probably very very small)
Two notes: 1) you assumed costant purchase value of money. It is disproved by barely existence of CPI. 2) You assumed no innovation (or at least, that all innovations value is assigned to innovators, disproved by a simple study on income of highly skilled technical people). You're assuming the value of work of unskilled people is costant. Another valid assumption could be the contrary, on the premises that unskilled people relief more skilled people of work they should have done themself, so the value of their work raise as value of skilled work raise (althrough not at same level, to mantain incentive to invest on skill-building and innovation). Think on domestic help: all work done by low-pay home helper is a relief for someone else with a higher value work. Now when the latter's income raise, his/her break-even value for home work raise, and thus in the long run the value of home helper should raise, too. Innovation and productivity growth should benefit all the country, not only innovators. Main problem today is that income growth of top 10% it is not anymore related to innovations or productivity growth, but only on bargaining power. Thus it is a zero-sum game, someone else have to pay for that growth, becoming poorer (absolutely poorer, not only relatively). Income is becoming less and less a proxy for productivity. IMO, of course.
The real problem it is that person do not have ten times real income than before, thus spending that income, say travelling or in personal services, create 9 more jobs and all stay better. Think on what people say they would do if they become richer. Often, travelling for tourism, going to spa, have a higher lifestyle, ad so on. All these wishes require work, and so require more jobs. If you see it at sistemic level, doing the same work with less people enriches the system, and create more (different) jobs, IF productivity growth is shared and not buried in a vault.
There was an author on Coasttocoast last night... http://www.amazon.com/Looting-Ameri...=sr_1_1?ie=UTF8&s=books&qid=1254697350&sr=8-1 Really convincing guy... he says it all started in the 70's with the big deregulation push that is still going on today... He didn't address the problem of productivity at all though.. but deregulation and jobless recoveries absolutely points to the rich getting richer and the poor getting left in the dust.. oh and keeping the borders open to bring in millions of workers... really brilliant in the face of everything else that is going on, just the real crowning glory of the leadership of the US...