True or False: Productivity of Machines > Productivity of workers

True, however there are consequences.

I read an article on the Financial Post and it was about how Canadian companies are putting machines before jobs. Canadian companies are planning on laying off some workers so they can use the money saved for more advanced technology. Friday, Statistics Canada reported that the economy let a net 6,600 jobs go in September. But where will these unemployed workers go? By increasing the unemployment rate, the income of families is going to decrease which will make those families less likely to spend. If they don’t spend, then the circular flow of income and expenditure wouldn’t be the circular flow of income and expenditure because there is no wages paid =>wages received => consumer expenditure and so on…

Although I understand why companies would want to invest on more technology, for the sake of keeping the economy going, we should not encourage the decreasing employment rate.

Sources

http://www.financialpost.com/news/Canadian+companies+machines+before+jobs/3644117/story.html

http://www.tradingeconomics.com/Economics/Unemployment-Rate.aspx?Symbol=CAD