@Purplelibraryguy
It should be noted that in the chapter in question, his explanation of Human Capital is not why he believes poverty exists, as he does reference how the economy is involved and other external factors throughout the book. Rather, he is explaining the principle that people have marketable aspects to themselves that will lead to inequality and how inequality itself is not the problem so long as everyone is progressively getting more and more well off. He is not solely saying that all inequality comes from a difference in ability or skills, but that so long as there is a difference in human capital, there will always be inequality and that that's not necessarily a bad thing because economics isn't a zero-sum game, and one person having more won't automatically lead to someone else having less because they're not finite.
The issue you mentioned is related specifically to the fact a higher quality of skill is being demanded in the labor market as progressively advancements in technology and automation eliminate the need for certain jobs, which is called structural unemployment. If more people are incentivized to get college educations, but they get skills that aren't needed in the labor market, they'll have to accept lower wages as a fact of nature. Additionally, the labor market follows the process of supply and demand, meaning if everyone became doctors, the demand for doctors would go down and they would be poorly paid because they could be easily replaced. The reason why young people are having such an issue now is due to their size being larger and them having to compete with the previous generations as well, meaning there's a smaller supply of jobs. Additionally, someone fresh out of college is still lacking job experience and so someone who just got a doctorate is not going to be a promising as a life-long surgeon because of it.
What's the way to fix it? Entrepreneurship. It's one of the five factors of production, (The others being resources, land, labor, and capital (both human and economic)) and it will be reliably able to make new jobs if businesses are able to open and compete. My grip would therefore fall under large corporations who intentionally do shady business practices that seek to limit the abilities of new up-starts and firms that lead to them not being able to create more jobs. Remember, the amount of jobs an economy can have is never finite, and if they have the ability to produce goods or services, they will be able to create new jobs for their businesses. It's a question of letting new businesses open up to increase the demand for labor. The current youth is facing a period of more competition for their labor, which is a natural part of the economy and is hard to solve as it's pretty natural. Though keep in mind that the demand for labor tends to flux, too, just as the economy does as businesses open and close through time and go through periods of high investment and bursts in the economy and periods of low investment and spending.
I should also mention that the author's reference to Bill Gates was because he was the richest man alive when the book was published, and his argument was that even if his entire wealth disappeared in a single afternoon, he would have enough skills to bounce back. Hell, even the skills involved in "being a shark" are marketable and could be used to get yourself high-offices as positions. And whilst I agree that modern intellectual property law is fucked (thanks, Disney), I don't think that getting rid of those laws is a good idea as it creates disincentives for artistic fields due to the decreased ability to earn profit which would ruin the economy over time.
There's no solutions, only trade-offs. Trying to completely re-hull a functioning system with some problems instead of tweaking it slightly here and there would only create unbalance and wouldn't likely work or create a good economy.
Finally, I want to explain how labor works.
The NAIRU is used in relation to predict how the economy will tend to go. The natural rate of unemployment includes structural unemployment (Or unemployment due to a lack of demand for a specific resource or talent) and frictional unemployment, (or unemployment going from one job to another) and is typically 4-6%. If unemployment goes less than 4%, then it is unsustainable and the economy will eventually be forced to bounce back due to an inflationary gap, and if unemployment goes more than 6%, it is due to a recessionary gap and is typically tied to cyclical unemployment, or unemployment tied to the fluctuation in the economy. Economists calculate this using the Phillip's Curve, which demonstrates the correlation between unemployment and the inflation rate which has been demonstrated to exist mathematically.
This relates to the Aggregate Demand/Supply model which can also be used to demonstrate the labor market as of the relationship between people selling their labor and those who seek to buy their labor, as well as the relationship between most goods and services in general to the amount of people who demand them.
If price levels increase while demand same or lowers, it leads to stagflation-or what the US was going through during the 1970s and is the worst gap to be in as a recessionary gap due to the increase in price levels and decrease in growth.
It leads to a lower amount of consumption which leads to a lack of economic growth whilst prices still increase. However, what causes rises is inelastic and essential goods like Oil increasing in cost due to external factors, which force businesses to bite the bullet and pay which leads to increased costs for the same goods, and so GDP decreases.
There are two ways that the process ends up being resolved to be at equilibrium with full possible production in the long run-either employees will accept lower wages or the Keynesian approach-in which Government intervention to increase demand of goods leads to a higher price level but a functional economy.
Similarly, inflationary gaps cause the amount of supply to increase and the price to do so as well due to overproduction, and so the solution is either employees demanding higher wages which will bring the economy back to equilibrium or the Keynesian approach where governments demand less goods or remove funding which leads to the supply decreasing and the model returning to equilibrium.
How does this relate to the Phillip's Curve? Well, as more people are employed, the more money people have and the more inflation increases, and so the gap becomes inflationary. The solution is either for the government to do nothing and price levels to increase as the employees ask for higher wages or for the government to decrease demand and let the economy return to equilibrium. The reason government tends to take this approach is because voters tend not to like to have to pay more for the same good and because it lowers the likelihood of hyperinflation, which is a good thing. However, it's usually better if the entire process can be avoided all together as rising prices hurt everyone, not just businesses.
You seem to characterize the process as one that's intentionally designed to suppress workers and keep rich people at the time which isn't the intention and isn't really even the effect of what's going on. Instead, the issue lays in trying to keep everything in a sustainable rate of equilibrium and lower the fluctuations in the economy to make it overall healthier and more productive than it otherwise would have been. It's better for people to go through frictional unemployment where they're more likely to find new jobs than cyclical where more people are less likely to find one and the entire economy suffers because of it. Remember, because of how economics works, it's all about maintaining balance at a sustainable rate and when one part of the economy does well, the entirety of the economy tends to do well because of it due to the flow of money.
Radical shifts in the economy is bad and lower production times like a 20 hour work week would be a big shift and would lead to a lower supply of goods and services for everyone, which not only harm firms but also the people who work in them as prices increase due to a lack of goods to met the same supply while wages do not rise. It's not some grandiose plan by the elites of society to keep everyone else suppressed but merely a pragmatic case of necessity and demands for goods.
It's really a matter of macroeconomics more than anything.
