Overall productivity gains comes in many, small steps, and leads to greater overall wealth in society.  For illustration, look at the industrial world's standard of living compared to 200 years ago, before the industrial revolution.  Heck, just compare it to the 50's, before the last half-century's worth of accumulated productivity gains.

Now in your post, you mix up the concept of overall productivity with productivity per man-hour.  These are two entirely different things.  If 10 employees' worth of work is moved to a place with 50% lower hiring costs, overall productivity in both of the two places increases (though the productivity per man-hour stays the same, unless the work itself is also altered).

Of course the person being laid off is mad and/or frustrated by this.  But just as it is natural for companies to hire lots of workers when they do well, it is natural for them to shed workers when they do less well, or are able to do things more efficiently.  The latter frees up labor for the companies that are hiring, and such shifts are what enables the work force to, over time, go from good overall productivity, to better, and even better.

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Ideals are the ultimate motivators. But also the greatest causes of destruction.

A tip: Don't get too high on your ideals.