Frictional unemployment is a good way to handwave away the discovery, or not, of new jobs. You just wiped out that whole -type- of job, replaced it with (much lower employment) error checking.
If you assume that for a portion of the people in the transcribing job, that the transcribing job was the best marginal fit, then some of them don't re-enter the job market. Others have to take a worse job. If they could have been in a better job, they likely would have been. So their employment has gotten worse. May be quality, may be compensation, may be available time. Something's worse for them.
If they could have been in a better job, they likely would have been.
There are a number of reasons this is not the case. I'd wager that a main reason is "re-training takes too much time." If a worker gets laid off, gets his Associate's, and starts something new, well, that's a net positive scenario. He or she produces output in a new field, while the transcription software replaces their old output. Net positive outcome.
You call it "handwaving," but the above happens to many people. This is not some accounting trick economists have developed.
If you assume that for a portion of the people in the transcribing job, that the transcribing job was the best marginal fit, then some of them don't re-enter the job market. Others have to take a worse job. If they could have been in a better job, they likely would have been. So their employment has gotten worse. May be quality, may be compensation, may be available time. Something's worse for them.