What people have a hard time wrapping their heads around is that with computerization, automation, and various other factors viewed as “improvements in productivity”, whole classes of jobs have been rendered obsolete. To put it simply, in non-economist terms, we don’t need as many folks to keep the wheels turning as we used to. But the rub is that even though those folk aren’t needed as producers,
with the slim margins that many businesses operate at, they’re still needed as consumers.
Now some of those folks could eke out a marginal existence as low-level “entrepreneurs”, but how many cleaning ladies and pet-sitters do we need? In olden days, the surplus labor force was simply allowed to starve, but we, as a society, have decided that’s not who we are.
Don’t forget that Milton Friedman, the dean of conservative economist, was once asked: “What do we do with poor people?” His reply: “Give them money”.