Economies don't just cut out large populations like that.
Sure they do. Manual labour in the UK is an example of that. The coal industry, which actually benefited from breakthroughs in technology, such as steam engines and the spread of electricity, was killed by other breakthroughs in technology. It didn't have an effect on the country as a whole, but it did have a devastating effect on certain areas where a lot of people worked in the coal industry.
I live in an area where the coal and steel industry used to be huge. When it disappeared, everyone was fucked and it has not recovered since. I am actually going through this exact thing at the moment because I work in the steel industry and the government is refusing to buy us out.
The difference with automation across all industries is it isn't just going to kill certain areas, it is going to have an impact globally.
People will always find ways to make money
I think this is true, and it's why I think this will be a temporary problem rather than a permanent one. But it will be a problem, mainly due to there being basically no historical precedent for this at all.
People will always be spending and making money. Not necessarily in the same ways all the time, but humans are never satisfied.
Could you explain in more detail what happened to the coal industry in your area? Did people leave, or did everyone stick around?
People moved. In the late 1800s, around 70,000 people lived here. Now, around 90,000 people live here.
In the 70s, the steel industry took a shit, and 30% of the working population was unemployed, then in the 80s the government closed down all the coal mines and it got even worse. Strangely, this area greatly profited from WW2. The shipyard and steelworks were so important to the war effort that it was the first place to be bombed by the Germans, even though it is pretty far north.
I myself moved out of this area and only came back a couple of years ago. It is weird here. It feels separate to the rest of the country, like time stopped while it carried on everywhere else. Unemployment is still very high and the last time I checked it is still the heroin capital of the UK.
Economies don't just cut out large populations like that. Automation just makes things cheaper, so people, and more importantly businesses, will have more money to spend, either improving their lives or making their businesses more efficient in ways robots can't, or are too expensive for. People will always find ways to make money, and always want things to improve their lives or make them more money. Robots aren't going to change that.
Also, if robots start making robots, which will be pretty easy, then the barriers of entry in a lot of industries will be lower, introducing competition and driving prices down even further.
If we go really far into the future, we could see automation becoming a basic commodity, leaving less and less work to be done by humans, eventually reducing the human economy to occasional bartering of unique products or services.