In a pure capitalist system wages [for jobs where there are a surfeit of capable people] should surely tend to zero until enough proles have died to introduce scarcity and buoy the labour price.
The basic problem is that labour (as with several other inputs) can for a time operate below its long-term subsistence costs, by effectively drawing down its accrued capital. Doing so results in a net degredation of total productive output.
In conditions in which there is a ready supply of replacement labour, this is not a concern of the employer, unless those costs are somehow internalised.
Gregory Clarke (and many others) note that in the 19th century, cities such as London had natural reproduction rates below the replacement rate. Cities sustained (and indeed increased) their populations through net in-migration. Excpected life expectancy of a newly-arrived labourer was often only a few years, but wages were higher than could be commanded in the surrounding countryside.
See also: Backward-S bending supply curves.
I mean, you'd work for a lump of food if there were no other opportunities to acquire it, it's that or die in a few days. You'll last longer but not indefinitely.
We have a situation like this in the UK: large companies paying below subsistence wages, the welfare state (and food banks, and other charities) then makes sure those people keep housed and fed meaning the wages can be kept down. Those same companies then are avoiding paying tax; draining the welfare money with their wage tactics and not paying in to the exchequer.
The producer of commodities can, provided the opportunity to do so, seek other employment. So long as there is anything that may be produced and sold, they will cease producing some good X at a loss and start producing some good Y for profit. Or move elsewhere, or cease production at all.
If labour generally fails to command a sufficient wage to ensure its long-term survival (or, in extreme cases, short term), there is no alternative employment to living.
You live, or you die.
At best, at the individual level, you can die more slowly. But you'll die all the same.
The problem with living, as opposed to producing or exchanging merchandise, is that it has an irreducible cost, and you've got to meet that no matter what. If businesses take advantage of this, then what is being operated is not a profitable business, but quite literally a charity based on the transfer of wealth from the life-force of the workers (and perhaps the State through various welfare programmes) to the business owners. As you describe.
The key difference between the formulation I prefer (though I don't claim origination, I just don't know its origin) and the more familiar versions associated with Ricardo, Malthus, Marx, etc., is that I see the concept of an accrued labour capital -- health, fitness, skills, etc. -- as well as personal capital of the worker (housing, clothing, vehicles, tools, etc.) which do not have to be be replenlished on an absolutely continuous basis, but which, if not tended will over time degrade.
Moving from the individual to the market level, if there is a constant source of fresh labour then it's possible to "burn out" individuals and simply replace them with fresh young blood. As has been and is practiced throughout history and presently, around the world.
Again, the key is distinguishing various types of economic goods, and their behaviour in the face of market prices, and who it is that does (or doesn't) bear the full costs. I'm not saying this in defence of markets (I believe they allocate prices exceedingly inaccurately much of the time), but in acknowledgement of the observable behaviour. This isn't seeing the behaviour as desireable but as extant.
Again: labour at best returns its costs and those alone. Rents return profit in excess of costs. That is a fundamental inequality of any market economic system.
(The issues of other types of goods and the prices they experience extends the set of problems yet further.)
That is, bad news (famine, war, plauge, natural disaster) ultimately reduces populations and increases living standards. Good news (peace, prosperity, plenty) increases populations and pushes them up against carrying capacity.
Cf, Gregory Clark, A Farewell to Alms, though I believe it's pretty common.
Ensuring income adequate for access to these necessities is a fundamental and long-established principle of economics. "A man must always live by his work" comes straight from Adam Smith.
The problems are multiple.
Wages tend to (or below) subsistence. Rents (economic) eat up excess consumer value, not just producer costs. Not all people can (or should) work. And there are cases where risk components and externalities can lead to both over- and under-consumption (famously: healthcare, both ways).