New technology, effect on wage & employment?

Question

[1] If new production technology that allows workers to process more chickens per hour is put into practice, then, other things equal, the real wage of workers in poultry processing plants is predicted to _____, and the employment of workers in poultry processing plants is predicted to _____.

increase; increase

increase; decrease

increase; not change

decrease; decrease

[2] A similar question:

Imagine that a new technology allows firms to costlessly improve the productivity of their existing machines. What effect will this change have on employment and wages?

Employment will rise, wages will rise.

Employment will rise, wages will fall.

Employment will fall, wages will rise.

Employment will fall, wages will fall.

Answer 1

[1] decrease; decrease

[2] Employment will fall, wages will fall.

Assume you can produce more with fewer workers - you could do a reverse auction by telling all workers: I'll be cutting everybody's wage by 10 cents. Who wants to leave? The workers with the best outside opportunities will leave, everybody who stays now works for less. You repeat this type of wage-cutting until you have reduced the number of workers to the level that corresponds to your new (reduced) number of workers. You will produce the same output with fewer people at lower costs (i.e., aggregate wages).

[This assumes that the firm has all the bargaining power - if workers are unionized or have other ways to retaliate this might not work.]