The rising gap of upper and middle class in US, the important and often ignored reason

One important reason for the growing gap is actually quite ubiquitously mentioned, Outsourcing. But the real way how outsourcing affects is often ignored. Is is commonly known that outsourcing causes job loses in US by shifting those to countries with cheap labor. That is true. The counter argument for this, again, quite often heard, is that it reduces the prices of goods and thereby increases the value of money Americans have. Also, by reducing the operating costs, it increases the competitiveness of American companies and increases their revenue. All true. But the point which is conveniently ignored in the media and very well known among businessmen is something called the smiley curve of production. Most products undergo three phases in the process of their introduction into the market. The planning and design phase, the manufacturing phase and the sales and marketing phase. The planning and the sales phases are represented as the two upper ends of the smiley curve because most of the money is here. The bottom phase, manufacturing, does add most of the value, involve huge manual labor and number of people, but does not bring a lot of money, especially in countries like china where there are very few or no labor laws (yeah, we are back to the beginning stages of communist movement). As a result, most of the money made by American production goes to a very small number of people and hence the gap. Further, the vast machinization of American industries act in a similar way against the highly unionized and well protected American Labor.