Fortunately economists agree that labor is the source of all value in society. I am not super well versed in the peculiarities of economics in all its facets - but I do remember this. In the case of automation, it does create a large 'classless' and/or lumpenproletariat (who have to find means outside of conventional production such as crime) but more so it transitions us from manual to mental labor. Still, labor is required to design, manufacture, and maintain machines.
Additionally there is the effect of the rate of profit to become slimmer with automation - this byproduct of competition creates even more slim margins for capitalists to work under. This actually makes them more vulnerable to impacts such as strikes.
The depression of wages has to do with neo-liberalism, a call-back to the laissez Faire times of the early late 19th and early 20th centuries (ironically leading them into WW1 and the Great Depression - forcing a change in policy). After crushing the labor unions and the workers parties in their home countries, and with the USSR/Eastern Bloc showing serious flaws - capitalists made their move towards crushing all the progress made in regards to labor up until that point. This is still the prevailing ideological standpoint of many countries today unfortunately.
A.) Despite the difficulties, which are very high in this connected day and age - I do still think it is possible. For many it will be necessary very soon regardless. Unfortunately these conditions lay the stage for a violent and brutal struggle ahead.
B.) Complete victory would mean overturning the system fundamentally. To create a new system that does not require so much correction. I am eluding to a working class state, where the working class and the oppressed have their interests upheld from the start and by any means necessary.
I spent many years studying economics and still keep an eye on the subject. And the latest research and numbers from the job market seems to show that the transition from manual labor to mental labor is simply not happening at all, because automation can also perform much of the mental labor as well, and way better than humans in most cases. Thus the potential new mental jobs are not available for humans because companies invest in computer systems that can do the work.
For example, Google employs a few tens of thousands of engineers worldwide, which is a ridiculously low number of employees for such a massive multinational company. Or, if you look at another technological field, I've seen a company doing 3D printers advertise their ecosystem as so robust and efficient that one person can easily oversee every operations for 30 or 40 printers. Thus you would need only three people working in 8 hours shifts to take care of those printers working 24/7. Compare that to the tens of thousands or hundred of thousands of people working in the automobile industry a few decades ago.
I wish people stopped saying 'capitalists' to talk about the CEOs of big companies and the like who did their utmost to keep wages low, line their pocket and crush every worker's protection rule that they rule. That is not capitalism. In a true capitalist society, the workers, as a integral part of the whole economic circle, is paid a wage that allows him to live in decent condition and to have enough money to spend on thing, thus keeping the whole economy going. The society we live in today is not capitalist at all. We're not supposed to have multi-billionaires in a true capitalist society because the money that the company makes is supposed to be invested in means of production, ie personnel and machine, to produce more and pay more so the people can buy more, thus the money flows continuously from company to people to company in a never-ending cycle.
I do agree with you that, at some point; perhaps we are even seeing the first stages of it; there will be a very violent and brutal struggle. But I'm very skeptical that it will come from any sort of organizations, with clear goals and means. It will random, anarchistic in nature, with little organization, at least at the beginning. I also agree that the system needs to change, although I'm not sure that a complete overturning is necessary nor wanted: we know the problems, we know how they can be corrected, but the people currently in charge do not want to because they are the ones profiting immensely from the current flaws.
I believe that, with automation, we can and should do away with the whole concept 'labor being the source of all value'. I remember reading previsions by economists from the 1970s stating that, by year 2000, people would work 15h a week for the same wage, thanks to advance in automation, giving them ample free time to dedicate to other pursuits, whether it is spending time with their family, furthering their education or just practicing a hobbies. And that could happen today, we do have the technological means to do that.
You can't ask for something and then complain when he responds in some affirmative way. You and I have the same views, but you can't both want and be critical of a behavior someone has at the same time.