The companies who now have piles of cash because they eliminated a huge chunk of labor will spend far more on new projects, many of which will require tradesmen.
Economic waves never hit one sector and stop. The waves continues across the entire economy. You can’t think “companies will get rid of huge amounts of labor” and then stop asking questions. You need to then ask “what will companies do with decreased labor costs?” And “what could that investment look like, who will they need to hit to fulfill it?” and then “what will those workers do after their demand increases?” And so on.
I would look at the secondary consequences of the totaling of white collar labor in the same way. Without the upper-middle-class spending their disposable income, consumer spending shrivels, advertising dollars dry up, and investment in growth no longer makes sense in most industries. It looks like a path to total economic destruction to me.
Unless they do, or are severely weakened. Consider the net worth of the 1% over the last few decades. Even corrected for inflation, its growth is staggering. The wealth gap is widening, and that wealth came from somewhere.
So yes, when there is an economic boom, investment happens. However, the growth of that top %1 tells me that they've been taking more and more off the top. Sure, some near the bottom may win with the decreased labor costs and whatnot, but my point is less and less do every cycle.
Full disclosure: I'm not an economist. Hell, I probably have a highschool-level of econ knowledge at best, so this should probably be taken as a "common-sense" take on it, which I already know often fails spectacularly when economics is at play. So I'm more than open to be corrected here.
That’s a discussion about where wealth gains are going, however my comment was about the concept of excess capital, investment, and jobs.
Yes, the wealth of the 1% has increased over the decades, but so has investment. The economy still dwarfs what it was decades ago. There are more jobs than there were decades ago.
Hopefully you see my point but now. The “waves” of economics effects objectively didn’t stop at the rich.
Jeff Bezos has a 233 billion net worth. It's not because Amazon users overpaid by a 233 billion but because his share in Amazon is highly valued by investors.
My own Amazon investment in my pension has also gone up by 10x in the last 10 years, just like Jeff's. Where did the value increase come from?
Is this idea of the stock market good for us? I don't know, but it's paper money until you sell it.
Economic waves never hit one sector and stop. The waves continues across the entire economy. You can’t think “companies will get rid of huge amounts of labor” and then stop asking questions. You need to then ask “what will companies do with decreased labor costs?” And “what could that investment look like, who will they need to hit to fulfill it?” and then “what will those workers do after their demand increases?” And so on.