Our economic system isn't really setup to work well in a situation where supply of labor drastically exceeds the demand for it.
Obviously some of the difference will be soaked up by new professions that didn't exist before. For example here is a list of jobs that didn't exist 10 years ago http://finance.yahoo.com/news/10-jobs-didn-t-exist-175608243...
I am convinced that prosperity is being driven by trade and specialisation as put forward by Matt Ridley http://www.ted.com/talks/matt_ridley_when_ideas_have_sex.htm...
Specialisation is a form of skill and so the issue is really what happens to unskilled labour. Everyone "knows" that education is a fix, but current education systems are extremely broken and closely modelled on the dawn of the industrial age https://www.youtube.com/watch?v=zDZFcDGpL4U
It will be interesting to see if the cost of living goes down since that will also greatly alleviate things. Increased automation should result in that.
There isn't any reason to suppose that demand for engineers and managers will ever come anywhere close to 100% of the working population.
Meanwhile, the advantage of theft, violent crime and the black market improves dramatically as wages decline to nothing.