Wrong because every person who supplies labor also generates demand for goods and services, which generates demand for labor. Simply "removing" unemployed people would not in fact fix the oversupply of labor.

I also explained that the problem is not just that employers are picky because of an oversupply, they are picky in ways that are actually not really in their own interest and which contribute to the oversupply problem.

Wrong. Additional demand beyond bare necessities is only generated if there is disposable income available which is not the case when there is a oversupply of labor driving down wages.

If employers would act systematically against their own interest by hiring only young people it would be easy for investors to come in eliminate them in the market. But they won't because they can't. Employers prefer young people because they are cheap and they hire them because they can.

Oh boy. The bare necessities of someone is already "additional demand" over that person not being present. Disposable income is a completely irrelevant factor here. In fact, disposable income is the part that doesn't generate the same level of economic demand because it can be saved rather than spent.

And no, it is not easy for investors to outcompete incumbents simply by being more efficient with their employment policies, especially not in a society like Japan. And my point is that employers are not hiring older people even though they could pay them less.