Foreign competition may pose some threat to American laborers, but this article points out that it is technology that has become the real threat. As factories automate more and more tasks fewer and fewer workers are needed in the industrial production chain. Even as the economies grow, labor sees fewer and fewer gains. There was a 4% decrease in labor incomes between the 2000s and 1990s. The share of income going to labor and capital used to be viewed as fixed; the decrease in labor incomes shows that this theory may not hold true. If gains are increasing in an industry who is receiving this added income?
Owners of capital have received much of the added income while laborers have seen a decline. The fact that labor abroad(China’s Foxconn) does represent 3.3 percent of the 3.9 percent decrease in labor share for Americans. Technology has lead to increases in highly skilled and poorly skilled labor and decreases in middle range skilled jobs.
With the increased expense for many companies of providing insurance for their employees. Automation of labor may actually make more sense with the opportunity cost of one more employee who needs medical insurance in contrast to one more mechanical arm.