Society shouldn't pretend these people don't exist but they're rightfully a different class of unemployed.
In any case, very few technologies (relative to everything that's created) actually make living standards better, mostly just things in healthcare. Almost everything else is pretty much a rats race fueled by business and profit, not by intentions of improving people's lives.
To make it a bit clearer...
Currently, humanity as a whole has the resources (materials, technology, etc), to provide good housing, education, food and healthcare for everyone on this planet. However, everyday we choose not to do that and do whatever else it is we do instead.
This is just an observation, not a moral judgement on anyone in particular. By the way, I'm personally not doing anything to change the current state of affairs, so I can't really point any fingers.
Hopefully the situation will change at some point.
Which percentage of society should be permanently alienated from ownership and engagement, and who decides?
And it's a valid point! If people really are choosing not to take jobs that are readily available, then automating those jobs is a net benefit.
Now, we should not ignore the fact that this is stated as a hypothetical! Are there a mass of unemployed who are choosing not to work? And would all of the people who lose their jobs due to burger flipping automation be able to find new jobs or be happy with no job?
Those seem like the more relevant questions.