[mNovak]

I agree that the worker becoming more productive due to some capital equipment generally won't see any benefit from doing so (unless it requires special skills to operate). But I think the argument is that the end consumer will eventually benefit from the increased productivity.

In your example, yes, the factory owner can take their $100/hr of profit. But among the various factories, some owner might take $25 of that profit and instead undercut their competition to grow their order book. Other factories respond in kind, and the consumer is getting cheaper products.