The mental case for many of the have nots is the haves foot on their neck. Not everyone can be a have. When it gets out of balance the have nots will historically overturn the state and slaughter the haves and no one will miss them when it happens.
History is full of cycles. We are no different today than yesterday as a people, only our rhetoric has changed. We are a culture of narcissists. As you state, "I don't know how to fix this."
The only fix for it is a minimum standard of living accepted that has healthcare, clean and safe housing, etc. Yes, that is the dole, but we should consider it buying the peace.