An influx of skilled, ambitious people

It's all about productivity. The Vanishing Middle Class by Reuven Brenner. Perhaps a source of woes is that we are losing our comparative advantage in freedom. If so, uh-oh.

For background: After World War II and well until the 1990s, the United States enjoyed an influx of skilled, ambitious people who were escaping a world largely ruled by dictatorial and unstable regimes. Hundreds of millions of others, those with skills, drive and intelligence equal to those lucky enough to be born in the West, were trapped behind iron and other curtains. As long as the US enjoyed monopoly powers on the leveraging of talent and capital, it could impose high taxes, with large segments of the population benefiting from high wages and transfer payments. Political barriers gave these groups of employees in the US the negotiating powers to extract those benefits.

The fall of communism and the political stabilization of what we now call "emerging countries" eroded the US's advantages, thus weakening these negotiating powers. Talented, entrepreneurial people and capital can and still do move to the United States, but capital and industrious individuals can also now exit it in favor of newly decentralizing parts of the world, where hundreds of millions of individuals are eager to work hard and catch up.