The problem is that 'standard economic theory' is not in complete agreement here. As the article you linked says, classical economists (whose argument about the

The problem is that 'standard economic theory' is not in complete agreement here. As the article you linked says, classical economists (whose argument about the market clearing is the one you put forward) do not believe in cyclical unemployment. Those who do believe in it don't believe that the employment market clears of its own accord. A separate issue is that people can't lower their wage demands to any level. To get a job you must have a home, a means of commuting and the basic necessities of life. There are also costs associated with employing someone, so even if someone worked for free, the employer could not necessarily justify the cost of employing them. These are theoretical issues though. The existence of unemployment benefit means that the only people who will reach these depths are the homeless.