This is a key point. People talk about increases in labour productivity (how much output per given unit of labour) but this economic definition doesn't match the day-to-day meaning of the word.
If I devise a new process/system which means that I need only 1 employee rather than 1000, for the same amount of output, that remaining employee hasn't suddenly become 1000 times more productive. (Although it would be measured as such by economists.)
Why should we assume that the capitalist (or the market) would reward workers for such technological progress?