I think the base economic theory is that companies will pay for labor exactly what that labor is worth to them. Analogous to the concepts of full-time and part-time employment, is the concept of full-coverage pay or partial coverage where the government picks up the rest.

The problem I have with the system is that everyone who is actually paying receives the least benefits. It's just wealth redistribution. But inevitably it also disincentives work the more the subsides increase in value, and the sharper the drop-off as additional work is performed.

So how do you structure a system which encourages work? The obvious solution is that benefits should increase as tax payments increase. The makes working super-incentivized, and provides a massive boost to productivity.

Aside from technology improvements, which the economists tell us aren't really providing bang for the buck anymore, increasing the size of the workforce increases GDP growth.