"Now, if a company were to improve efficiency AND increase the size of its plants, to keep the same number of JOBS, then I'd be applauding the gain in efficiency. "  This is what I said from my first post, which pretty echoes your thoughts about leaving plant size the same and produce twice the goods with the same labor force.  However, this hasn't been the reality within Canada.  Output on an individual plant basis may have increased (I still haven't looked to see if overall output within the country has increased) however they've also downsized the plants at the same time.

So we've got twice the output with 1/2 the labor force (numbers not real, just for illustration purpose) versus 4x the output with the same labor force. 

And as far as service jobs being higher paid than manufacturing, thats not a reality up here.

Rod