OP's post misses the root of the problem: Increasing technological productivity slowly eliminating the market for manual labor and low-skill jobs. The only jobs left for these people is service jobs which don't pay enough. These people aren't going to go away.<p>Not every human being is a well-adjusted intelligent computer programmer. Some just want to be told what to do, and get paid for it. These jobs are slowly being replaced by machines and they will never come back. McDonalds will eventually replace order-takers with machines, but they will still need customers. What will this segment of society do?<p>That seems to only leaves three options to solve the lack of jobs:
1) Create busywork jobs for them
2) Provide welfare for them
3) Oust them from society<p>First and third options tend to be impractical, and the second and third options are objected to by the populace on moral grounds. Leadership chooses the status quo and the problem just gets worse as the economy becomes increasingly knowledge-based.<p>You might think that another option is to give businesses money, but that doesn't work in the long-run because business' opportunity for investment is increasingly in ventures where menial labor/low skill jobs are either done overseas or by machines. Especially in America where you can often get that labor elsewhere for much cheaper.