This is the one of the two biggest flaws in most macroeconomics. They act as if the national economy is a closed system. Of course, if wages rise too high, (in addition to automation) the products the wages were producing can be produced in other economies and delivered as finished goods. Immigration is of course another violation of the closed system model, where labor flows to places with higher wages. (The other biggest flaw in macro is treating the economy as an undifferentiated GDP factory)