In terms of manufacturing this is a well known myth, and is one of the reasons why relocating plants offshore has had mixed success. Labor as a percentage of manufacturing costs ranges around 15%, so at the most you might gain a 10% reduction in overall cost. Add in all the additional expenses of a broken supply chain, cultural problems, and other related issues, and often you actually end up losing money.
Markets tend to be self-correcting because of this issue.
We made a country where no sane person would want to run a business. Now, we complain when all the sane businesspersons go elsewhere to run their businesses. Am I the only guy who sees the logical disconnect here?