Do you not think that Great Society programs have vastly increased our prison population?
More city scaled implementations of it. The deliberate/inadvertent destruction of families, the failure of education, etc...
That and the war on drugs, of course. Eliminate that and there goes what, about half our prison population?
And when you speak of using government to increase demand for labor, and incentivize OJT, you do mean getting government out of the way (including an elimination of minimum wage), yes?
A big part of it, yes. Right now we're actually below a lot of Europe in ease of creating a small business. Elimination of minimum wage would do relatively little though, until we get a self-sustaining structure/culture in place the government will have to do what it can to get workers trained to the point that they're worth the money to employ. Thus the 'more expensive in the short term' corrective actions bit.
Roughly speaking, we need to do some things to push back against the Chinese taking all of our manufacturing, some sort of tax system that encourages businesses to hire people, rather than penalize them, would be nice.