This week's EE Times has troubled me. As an example, "Intel alone probably employs more 64-bit processor engineers in one city in India than are working across the whole of Europe on the technology." Another example, “BMW is developing 10 concept cars in Chennai [India], because it can produce 10 concept cars every two years there, compared with one concept car every four years out of Munich.”
Europe and the U.S. are approximately equivalent in cost of living. An engineer living in the U.S. or Europe pays more in taxes than two or three engineering salaries in India. In the U.S., medical insurance costs are equivalent to four Indian engineering salaries. It isn't that the western engineers and scientists have the corresponding increase in disposable income - it is that the western countries have that much higher cost of living.
Nokia closing German plant, slashing up to 2,300 jobs explains the European cell phone manufacturer was relocating manufacturing from Germany to Romania, where the cell phones could be manufactured at 10% of the cost in Germany. In the U.S., headlines such as Dell to close Austin Computer Factory, lay off thousands shows the phenomenon affects all western countries.
There are no easy answers. Is America falling off the flat earth? is a free book that can be downloaded from the National Academy of Sciences. Authored by Norman Augustine, former CEO of Lockheed Martin, it offers both observations and counsel. With regard to the wage disparity mentioned above, he says, "[it] appears highly likely that the United States will suffer a substantial wage disadvantage for many years to come and that some means will have to be found to offset that fundamental tilt of the flat earth away from America."
He uses the story of Russia leading the space race in 1957 with Sputnik as an example of where America once lagged and then mobilized to the challenge. His basic prescription for our illness is education. (See the book for the real prescription which also includes some regulatory and policy changes as well.) We have to lead - not build isolationist walls. I would assert that we also need some national policies to protect American workers from exploitation by multinational corporations.