Avoiding unemployment in a post-growth economy

There is increasing concern about rising unemployment in early industrialised countries, arising from low economic growth or the emergence of new labour-displacing technologies, notably AI. Post-growth economics has explored a number of strategies to prevent unemployment, such as working time reductions. This paper contributes to this discussion, focusing on two strategies. The first strategy involves a shift in the composition of output towards labour-intensive services. It is argued that Baumol's cost disease may be less problematic for this strategy than is commonly believed. The second strategy involves re-orienting production towards more labour-intensive processes (taking the composition of output as fixed). This strategy has received less attention, partly because it appears to involve rising costs of production. Drawing on insights from post-Keynesian and institutional economics, this paper argues that under some circumstances more labour-intensive production processes can be adopted without increasing unit costs.