Abusive low wage employers wouldn't be able to find employees who would put up with their shit.

A generous welfare system accomplishes a few things.

Number one, it provides for people who are unemployable, those who have "personal baggage," mental illness, personality disorders, simple ass-backwards cussedness, whatever.

Number two it puts fear into the hearts of abusive managers that one day they will fuck up badly enough that their employees will say "take this job and shove it," and walk out, because frankly welfare would be better than a crappy minimum wage job with an abusive boss. Most mentally fit people would rather work than be idle so there will always be plenty of incentive to find and create good jobs.

Number three, a generous welfare system keeps money circulating in the economy of ordinary people to the benefit of everyone, most especially small businesses and communities, and prevents the ordinary economy from going rotten when Wall Street and the politicians take a dump. People living at the bottom of the economic ladder have to spend their money on things like food and clothing and basic shelter whatever the hell the stock and bond markets are doing. They never throw huge piles of money onto the gaming tables of Wall Street where it circulates uselessly to the detriment of all but the obscenely wealthy.

The plain fact is that some people can't leave their baggage at home, but everyone has got to eat.