If improved automation lowers the barrier to entry faced by small business owners, it could increase labor demand. I think it's more likely to augment the home industry side gigs that every working adult is going to be required to have due to a lack of adequately paying jobs.

assembly lines and machine tools allowed blue-collar workers to be more productive

Thank you, machines! We are so grateful to be more productive!

This transition should be closely managed through labor laws and UBI, so that income across the board tracks with increases in overall productivity, and to correct the large errors that produced such high economic inequality due to wages not tracking with increases to productivity over the last century. It calls for a "great reset" IMO.