No, it's not. If I have 10 employees earning $20/hour and I replace them with 50 employees earning $5/hour, my employees now have an extra $50/hour in purchasing power.
We save a few pennies on the dollar on imported retail prices. This is deflationary too.
And we purchase more products at the lower prices than we did at the higher prices. People living below the poverty line in the U.S. today have a better standard of living than someone in the middle class did even as recently as 25-30 years ago.
Most likely, the 10 employees @ $20 an hour will be replaced with 20-30 employees @ $5 an hour, not 50 employees @ $5 an hour. And, those $5 an hour employees are likely sending some of their wages back home, too.
(The whole example needs a "x2" on the wages, for 2015, but that doesn't change the argument.)
People living below the poverty line in the U.S. today have a better standard of living than someone in the middle class did even as recently as 25-30 years ago.
No way. "Standard of Living" as presently figured has almost no relation to reality.
Case 1: Sure, a thingamajig I purchase today may cost half as much in 1985 dollars as it did in 1985. But it likely lasts a 3rd as long.
Oh sure, there are great gains in tech, in particular. But, even so, do they really make for a better life? I'll take a good rod and reel or a decent rifle (at 1985 equivalent price) and the activities that go with either, over an Ipad, any day. I'll be healthier, and the former will serve me or my children a lot better if things go splat, too.
Case 2: In 1985, the average middle class family could afford college for a couple kids (at least at a 2nd tier in state 4-year school, with the kids working summers). In 2015: Impossible without major gov't help. In 1985, the average family could readily afford their own health care / insurance without gov't aid. In 2015: Very difficult if not impossible.
Also, WHY would I as an employer increase my labor costs, paint a bigger target on my back for the Gov't, and most likely have a more difficult to work with and much less stable work force to boot? (This assumes my business' productivity is held at a constant; if it is not, the entire argument is skewed.)