It's not necessarily the case that cost-lowering innovations will drive demand for labor down, even without increases in capacity. Usability innovations are of

It's not necessarily the case that cost-lowering innovations will drive demand for labor down, even without increases in capacity. Usability innovations are often of this variety. If I can hire two people who work half as fast but at 1/4 the price each because they require no special skills, I can profitably produce the same goods with half the input costs and a net doubling of the employment I create. Such innovations certainly exist, and there are even some reasons to expect they'll be more common in the future: an uneven distribution of income means more places to find cheaper labor.