RedKing, educated English-speaking and technically adept workers are worth far to an American company that needs those skills than all the child labor in China, so that's a false dilemma.
It's a false dilemma for certain sectors. But not for manufacturing, broadly speaking. Or certain types of service sector jobs where customer interaction is minimal and physical location is irelevant (records processing, for instance). And these same sorts of jobs tend to be low or negative "value-added" jobs. The service sector jobs are particularly tempting to offshore because they're rarely "value-added" jobs. That is, they don't directly contribute to revenue--they don't make or sell a product, but are instead support for the overall business model. They're considered overhead. Customer support is a great example. Providing support for your products is seen as a net loss of money, but not providing it could lose you customers in the long run. But because it doesn't actively generate revenue, it's a liability and one of the prime areas for pricks with newly minted MBAs to come in and 'save the company money' by sending those jobs to Bangalore.
Don't give me that crap about companies valueing skilled workers. Most large companies treat their workers as interchangeable parts that can be replaced as needed. The days of "The Company" taking care of you and giving you a gold watch and a nice pension when you retire are long gone. Now you're more liable to get the axe when a couple years shy of retirement, to save the company from being on the hook for your whole pension. If you even have a pension. More often, you have a 401(k) which thanks to the rampant mismanagement and greed on Wall Street (laissez-faire capitalism at its finest), is worth a fraction of what it was a few years ago.
And now you want to take away the price floor on the labor market, during a period of near-record unemployment? I guess in your Ayn Rand fantasy-world, those desperate unemployed rubes would throw themselves at all the new $1.50/hr jobs that would spring up, and the Captains of Industry would stride boldly forward with the surge of cheap domestic labor at their disposal.
But in the real world, very few people are going to work for less than the current minimum wage, other than illegal immigrants. At a certain point, the costs associated with working (dependent care, lunches, travel to and from work, wardrobe/uniforms, etc.) dictate a logical minimum wage, even if you take unemployment benefits and/or welfare out of the picture.