Tech unemployment is sooo unhip!

One of the internet's more intelligent economics bloggers posted this yesterday. I read in high hopes for some mention of technological unemployment, believing, as I have done for some time now, the term must surely gain new traction soon, but found none. Micheal Shedlock, a writer I respect, lists twelve reasons why the "recovery" might turn out to be a job loss affair (i.e. recovery with rising unemployment), and not one of them mentions technology.

It seems well educated economists truly believe technological developments that replicate what humans can do for the economy can only lead to rising employment. Unemployment is caused by other things, like over-capacity, over-consumption, outsourcing, consumers economizing, etc. I am not in a position to argue against each of Mr Shedlock's 12 points, but do wonder at this general and stubborn refusal to take an open and honest look at the role of technology in this process of rising unemployment.

This is my take, for what it's worth:

1. humans are biological entities with a limited range of abilities;
2. humans are unstoppably inventive, and getting better and better at replicating these human abilities, even improving on them;
3. as we invent more and more hardware and software that can replicate more and more of the finite range of our "natural" abilities, there is less and less need to employ humans to produce what we want to consume;
4. as less and less humans are needed in the work place, there is less and less purchasing power, which leads, in a heavily consumerist world, to increasing levels of debt, or over-consumption; and
5. the debt burden can only increase for so long until it pops, leading to the situation we have today -- a job loss recovery.

Now maybe my 5 step process is too simple, I don't know (I do like to keep things simple though), but doesn't it make sense? Why do we see, globally, falling labour participation over a ten year period of positive GDP, and certainly over a decade of increasing production efficiencies? This inquiring mind wants to know.

If technological developments which improve productive efficiencies lead to higher employment levels generally, why then is there rising unemployment anywhere? Why rising natural employment? Surely it would only take a few years for humans to retrain to take on the new work? Not generations surely? I'm going to take a look at employment levels in India, China and South East Asia, beneficiaries of outsourcing. Just what exactly is going on here?