Wage stagnation is not accidental but a result of two concurrent policies. By sending manufacturing jobs overseas and simultaneously bringing in low-wage labor, corporations create a market where domestic workers lose nearly all leverage to demand higher pay for remaining jobs.
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The decline in U.S. manufacturing isn't just about labor costs. A crucial, overlooked factor is the disparity in savings. While Americans consumed, nations like China saved and invested in capital goods like factories, making their labor more productive and thus more attractive for manufacturing investment.
Bringing manufacturing back to the US won't mean a return of old assembly line jobs. The real opportunity is to leapfrog to automated factories that produce sophisticated, tech-infused products. This creates a new class of higher-skill, higher-pay "blue collar plus" jobs focused on building and maintaining these advanced manufacturing systems.
From China's perspective, producing more than it needs and exporting at cutthroat prices is a strategic tool, not an economic problem. This form of industrial warfare is designed to weaken other nations' manufacturing bases, prioritizing geopolitical goals over profit.
Just as NAFTA brought cheap goods but eliminated manufacturing jobs, AI will create immense productivity via a new class of "digital immigrants" (AIs in data centers). This will generate abundance and cheap digital services but risks displacing vast swaths of cognitive labor and concentrating wealth.
A powerful mental model for the future of work is a three-step pipeline. If a job can be done remotely in a high-cost country, it can be offshored to a low-cost one. Once offshored and process-driven, it becomes a prime target for AI automation. This positions remote work as a transitional phase, not an endpoint.
America intentionally avoided solving illegal immigration because it serves a crucial economic purpose: providing a flexible, cheap labor force that doesn't draw on social safety nets. This benefits industries and consumers while placing little burden on the state.
Frame AI not as a tool, but as a wave of "digital immigrants" with superhuman cognitive abilities. Similar to how the NAFTA trade agreement outsourced manufacturing, AI will outsource knowledge work. This will create abundance for some but risks hollowing out the middle class and social fabric.
Restricting immigration halts a key source of labor for essential sectors like agriculture and construction. This drives up consumer costs and could cut GDP by 4-7%, creating a direct path to higher inflation and slower economic growth.
By shipping millions of jobs overseas, globalism forced American workers to compete with a much larger, cheaper international labor pool. This eliminated employers' need to compete for a finite domestic workforce, leading to wage stagnation. The proposed solution is to bring manufacturing jobs back to the U.S.
Globalism was highly successful, lifting millions from poverty. Its failure wasn't the concept itself, but the lack of strategic boundaries. By allowing critical supply chains (like microchips and steel) to move offshore for cost savings, nations sacrificed sovereignty and created vulnerabilities that are now causing a predictable backlash.
