Capitalism does attempt to marginalize labor. One can't blame capitalism. Unions have done everything possible to get themselves a bigger and bigger piece of the pie. That's the same greed for which Simon attacks capitalism. The fact is that capitalism figures out a way for technology to build workarounds to labor. And in so doing it leaves labor at home watching TV or if they are working asking, "Do you want fries with that?"
Currently, the tack is toward feeling sorry for labor and making sure they have all the comforts possible...without having to work! And they like it. They've figured out workarounds too. Which is how to maximize their part of the pie without working and take from capitalism through taxation. But capitalism is not going to give up their part of the pie unless forced. And they will continue to build workarounds to labor which will marginalize labor.
Here's where Simon's train runs off the tracks: "The last job of capitalism – having won all the battles against labour, having acquired the ultimate authority, almost the ultimate moral authority over what's a good idea or what's not, or what's valued and what's not – the last journey for capital in my country has been to buy the electoral process, the one venue for reform that remained to Americans." If capitalism is buying the electoral process they're doing a pretty crappy job of it! I would say they could learn a little from labor in that regard. Finally he talks about 1932 and the emergence from The Great Depression but never mentions the role the spike in consumption for World War II had. Will this Nation continue in a downward trajectory until a spike in consumption called World War III?