I hate mowing my lawn, if I can hire someone to do it at $10/hour, I'll do it. At $15/hour I can't afford to hire someone and I'll do it myself.
Well that's just you. There are plenty of people that would look at that as worthwhile still. I've made that call myself - "Oh its a few dollars more, that sucks... but oh well, it will still be worth it" and I pay it. The net overall is probably a few lost customers, but enough extra from the ones that remain that it's still at least as much as before, if not more. This is of course speculation and depends greatly on type of business, location, etc. But I think that example hardly "proves" anything.
My labor cost goes up by 20% so it's now more cost effective to invest in a $200k machine that it is to hire 10 people.
Can be true -- again, greatly depending on industry, etc. But now, you're going to need get that machine repaired occasionally, and call the help desk when it starts doing funny things. So now we've employed people. Jobs shifted from grass mowing to doodad repair -- and doodad repair probably pays a good deal more than mowing the grass, so a net win. Assuming we can get people trained for these new jobs.
That's the main wrinkle, and why I support cheaper/free community college training, especially for those that have been laid off and looking for a career change. We can't stop the world economy, we have to learn to evolve with it.
But it's also worth noting that the jobs that are getting destroyed are the shit jobs where you are being treated like a half-machine already.
We would all be better off if all the repetitive jobs like cashier were eliminated and people could actually do jobs that they enjoy.
Whether this is possible is obviously subject to debate.
Definitely I encourage everyone to do things they enjoy. The problem is most of the time, those more enjoyable jobs (and not necessarily enjoyable in the sense of being a slacker, but for example, I'm a big tech geek and math nerd and enjoy working with numbers -- but being the "numbers R&D guy" isn't typically a job offered at most companies) don't exist, or are actively laying people off.
Studies have shown much of the jobs created in the "recovery" were low-paying retail/fast-food jobs. So I *wish* we could say they were all getting destroyed and we were progressing to a more enlightened society of creative people doing awesome things like sending people to the moon, but not so. We need to find a way of making that happen though.