I believe the best way to solve the problem of lying flat is to encourage everyone to lie flat, or even to give money to young people to support lying flat.

1/ First, lying flat is definitely not a subjective choice; objectively, Chinese young people's ambition, diligence, and willingness to strive are at least among the top 10% globally. But people need rest eventually; lying flat for a period to improve physical health, mental health, or learn new skills, try new directions, is beneficial in the long run.
2/ Secondly, why is there involution? Why are labor laws not protected? Why do overtime and unemployment coexist? The essence is supply exceeding demand, meaning "if you don't do it, someone else will."
Encouraging lying flat, reducing supply, might also improve the supply and demand problem; if there aren't enough workers, you have to hire, and if you can't find workers, you need to offer better treatment and conditions.
If you say it's because high labor costs lead to no profit or losses, from an economic perspective, you should stop operating; after all, profits can't always come from exploitation and squeezing labor.
3/ Finally, providing economic support and a safety net is the prerequisite for consumption; offering mental relaxation can create consumption motivation.
Once consumption starts, operators can make money; when operators make money, they can provide more jobs and raise wages. When everyone has money, they will naturally be willing to spend, buy houses and cars, get married, and have children.
In the current situation, promoting the struggle and opposing lying flat is more like pulling a rope.
There is surely a remedy within three steps.