I am a bit confused by the framing of this problem as being about GDP. In the situation I think you are describing (in which automation eliminates jobs and lowers costs), I believe that real GDP would increase. It is possible that nominal GDP would decrease if there were sufficient decreases in production costs, but that would generally be phrased as a form of deflation rather than as a decrease in “GDP”.
Owen Murphy
Karma: 13
Kidney donation might be an option. There are a few different posts about it on the forum (it has its own tag).
I would also note that the number of jobs being created is not independent of the number of people unemployed (even structurally unemployed). If there are significant job losses as a result of automation, it seems likely that the government (either through fiscal or monetary policy) would try to stimulate the economy (increase aggregate demand) in order to create more jobs. The reason that the government does not always just increase total jobs is because such policies can cause inflation when unemployment is pushed too low. However, I don’t think that would be a concern in this case. The reallocation of labor across industries is not perfect and can be quite harmful to individuals, but I seriously doubt that people will become unemployable.