These jobs can't be outsourced overseas but in essence the labor can be.

Reading SDAITech1's post I was reminded in general of the related phenomenon of outsourcing, but I hadn't thought of a way to put it so clearly and starkly as you did. In terms of the effect on the labor market, workers stationed overseas who send a stream of money back to the home country produce the same outcome as directly moving jobs overseas.

Personally, I think both trends represent the Achilles heel of free-market philosophy. While it's true that most of the time individual actors pursuing their own self-interest without regard to others or to consequences can produce a positive outcome on average, such a system has the possibility of entering a "pathological" state when a large number of the players jump on a bandwagon to act in a way that's locally beneficial but globally destructive. Then the bad decisions don't cancel out, but are reinforced and an economy can enter a death spiral.

The longterm risk of a multipronged attack on the labor market is that the buying power of those workers will decline, and ultimately the revenue of the businesses that happily outsourced jobs and squeezed their workers mercilessly will decline too. Globalism can only delay the inevitable, as businesses play a shell-game of moving on to greener pastures after they've overcropped the old ones. When the global labor market has been levelled down to the standard of living of a 16th century European serf, who will have the money to buy the goods?

I think the answer in this case, like all cases when the economy's at risk of going irrational and self-destructing, is government regulation. Yeah, I know that protectionism's abhorrent on principle to many (and in fact I'm not comfortable with it in most cases, either), but in this case we're talking about acting to protect a general market rather than a particular industry. Protecting the consumer is fundamentally different from protecting the producer, because consumers with money spread it around across all industries and thus promote the general economic welfare. Relief for the middle class is the opposite of favoritism.

I know I'll get some strong argument against the idea of doing something, but I'd hope the laissez-fairists can explain how a downward trend in wages and downward mobility in general is actually a good thing for the country as a whole. Big business got big and wealthy becaues the American middle class got bigger and wealthier in the second half of the twentieth century; please explain how outsourcing and cheap immigrant labor won't cut the throat of American businesses as well. Sellers don't prosper without buyers.