I used to research this area extensively and led development of a marketplace product at Xerox. As part of this, I researched the space a lot, and got to know the CEO of oDesk, Gary Swart quite well. We've talked about this sort of thing at length. I interviewed him a while back:

http://blog.trailmeme.com/2010/0...

First, you have to get your facts right and keep getting them right. Before you do that you have to get your framing right. I'll talk about labor for digital work, since mfg.com adds a layer of complexity that I don't want to get into since it would make the answer way too long. But the same ideas apply, mutatis mutandis.

Framing: understand the trajectory of the loose idea called "outsourcing."

1. It used to be static labor economies within national boundaries with companies doing everything they needed to function themselves.
2. Then we got to "core competency" in the 80s and 90s and companies began outsourcing, within their own countries, functions that they didn't want to specialize in.
3. Then it became static patterns of international outsourcing based on classic Ricardo style comparative economics. India for software, China for hardware etc.
4. Then we evolved to full value-chain thinking and understanding of total true costs and we started thinking in terms of best-shoring. No, that's not an empty buzzword. It's a real thing. When you think real costs through, sometimes you'll find out that India is the right place to go, sometimes Ireland and sometimes (gasp!) right here in the US. Sometimes you will conclude that you need it in-house, other times a long-term large scale outsourcing partner like Infosys, sometimes small-scale on-demand like oDesk.
5. Now we've gone even beyond that to dynamic optimization of the value chain. Today India might be the best place to outsource, next year it might be Philippines, after that hey maybe the factors change and you bring it back to the US. On another dimension, one year you might have a department doing it in-house. Next year it might go freelance.
6. Then at the global macroeconomic level, we are progressing from asymmetric to symmetric labor/talent/work flows. Instead of work always flowing out to India or China and jobs always bleeding outwards into the uncertain free agent world, you have what I call "slosh." Today you have Chinese companies buying up small companies in the US. You have Indian companies creating jobs in California. If you are American, you might have no middle class jobs for your talents working for US companies, but hey, if you are smart, you might be able to grab outsourced work from a Chinese or Indian company trying to grow their native domestic markets. I know a lot of them are out there looking for marketing skill here for example. Or tech design skills. The asymmetry is still there, but in the coming decades expect it to become increasingly symmetric, with a LOT of sloshing around. Don't think of this as naive "globalization" ... this is a chaotic turbulent world where distance matters. Local knowledge matters. What is global isn't production, consumption and labor, but the connectivity and the ability of everything to slosh around in the same big pool with everything else. In some places and at certain times, markets will be highly local and local knowledge will be key. At other times and places, an opportunity will be open to anyone anywhere.

So the point is, you go from static patterns of production with fixed resource and asymmetric flow resource equations to hyper-dynamic ones with symmetric resource equations changing as fast as you can track the opportunities in the landscape. The more agile you get – lower organizational switching costs and transaction costs – the more competitive you will be.

So what does this mean for individuals? You have to be just as agile in navigating the shifting labor economy. If the demand for your talents is volatile and shifting, the supply better be light on its feet.

I am not going to be disingenuous and claim you shouldn't whine "who moved my cheese?"

But I am going to suggest you stop thinking entirely about the specifically American middle-class. That certainly IS dead as an economic idea. You have 3 choices:

1. Join the global middle class and take on the challenge of developing sufficient agility.
2. Join the local American underclass and start complaining endlessly. I commiserate, but it will do you no good (for sheer lack of economic resources for global mobility and capacity for digital production, the underclass is always going to be mostly local in every country).
3. Became one of the apex predators and join the global upper class by using all your talents and luck.

As an American you have the BIGGEST advantage ever to join the global middle class with massive initial privileges: your dollar will still go a very long way in many parts of the world AND your passport gives you more mobility than citizens of just about any other country in the world. As a newly-minted American citizen I have to laugh at one particular aspect of American middle-class whining: I had to deal with 14 years of random paperwork crap to get the amount of global-mobility freedom you were basically born with.

Use it. Learn a foreign language. Spend time abroad. When money runs low, go hang out in Bali for a while where a ghetto-level income in the US will buy you an emperor-level lifestyle. Collaborate, build your networks, learn to move flexibly between paycheck jobs and free agent work. Grow your capital assets – money, relationships, knowledge, stuff – intelligently. Marry someone with a similar mindset. Teach your kids the same values.

And yeah, don't be afraid to get work visas and live in global-citizen expat limbo for a few decades. Don't be afraid to contemplate retirement in Mexico or Thailand if it looks like your capital assets won't let you retire in the US.

Sure it's hard. Globalization is no picnic. But I wouldn't trade the adventure for anything. As a better-known Indian than me, Rabindranath Tagore, once said (I have taken the liberty of changing one word in this classic poem, Where the Mind is Without Fear, translated from the Bengali by Tagore himself, from Gitanjali...):

Where the mind is without fear and the head is held high;
Where knowledge is free;

Where the world has not been broken up into fragments by narrow domestic walls;

Where words come out from the depth of truth;

Where tireless striving stretches its arms towards perfection;

Where the clear stream of reason has not lost its way into the dreary desert sand of dead habit;

Where the mind is led forward by thee into ever-widening thought and action – Into that heaven of freedom, my Father, let my planet awake.