What is the real problem here?
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This is more or less a transitory problem. Even if this now causes 10M people extra on welfare, the problem will go away in wotsit 55-odd years. Of course, maybe there'll be no state in 55 years.
And that's assuming there really are no alternatives. With the screaming about needing more foreign workers, well, maybe this pool of labour can fill that need, who knows.
That there's little manufacturing on US soil left, I can't really be arsed to care. Partially their own fault for letting that happen. Then again, as cheap becomes popular it becomes more expensive, making manufacturing elsewhere interesting again. There's plenty of room for innovation here.
I don't think we should frame it as an insurmountable problem. There'll be change, and it'll be painful, to be sure. But with a little looking forward for opportunities instead of problems, a lot can be done.
Also, google has already lost all credibility as "doing no evil". But I still don't think I'm going to be enamoured of the idea of holding back true technical invention for the sake of the incompetence of the representatives failing to care for their large pool of workers.
Besides, it's a wider problem, much wider. Both in geographical sense -- foxconn building factories run entirely with robots, nary a human in sight -- and the technology sense. You already pointed out the Luddides (and they did have a point), and we've been doing nothing but putting people out of work.
Alright, not entirely true. We've also created a lot of cubicle potato jobs, both as "knowledge worker" (arguably positive) and as what looks like machine minders but really are minded-by-machine drones, barely thought capable of clicking an icon.
And that, that is much worse, for it makes us string puppets of our own technology. The same is happening in a lot of security applications, but the redmondian desktop is perhaps the most widespread insultingly patronizing string puppeteering of human workers available today.
But anyway. We've automated the shit out of many a thing, putting ever more people out of work, and in the meantime the population has done nothing but grow.
What, now, is the real problem here?