There is surely a shabby community of lowlives that feed off their right to live a miserable, poverty-borne lifestyle, but that number is minimal, I'm fairly sure...I'm not too sure about that. Even though I've been living in the UK for almost 10 years now, I'm not familiar with how the welfare system here works, so when I talk about welfare, I usually refer to the German welfare system.
I agree that most people actually want to work. The problem is that to many of them it wouldn't make sense. If you don't have any skills, you'd have to work for minimum wage, right? That means, the money you make will buy you the same as the money you get from the government if you stay at home, because then the rent and the bills are paid for. You only have to worry about food. Now let's say you create one kid. Then you get money for that kid, plus you can apply for extra stuff. Like, if you want a baby buggy and you work, you will have to buy one. If you are on welfare, you can apply for one - then use the one you got from your cousin and sell the brand new one on eBay. If you have three kids, you get the equivalent of someone working for almost 20€ an hour, which for an unskilled worker is a salary impossible to achieve.
In the end it is a system that punishes those who make an effort and rewards those who don't - provided they know how the system works. It's not that people are lazy or that they are lowlifes. In the majority of the cases they are just not stupid enough to start working, as that would be stupid from the financial point of view.
And I guess that is kind of what you meant when you wrote:
the very act of going back to work forces you to take a major pay cutCorrect? If yes, then here we have the actual problem with social welfare. And - yes - it does create an ever growing population of uneducated people. I wasn't talking about uneducated in the sense of stupid. They are often better informed than working people because many actually do have the time to do their own research. They are mostly anything but stupid. I meant uneducated in the sense of "not fit for the work force", meaning, those kids will grow up learning where to get them money from the government and they will know that the government isn't your friend, but an enemy, but they won't grow up to be engineers, architects or university professors, because the very environment they grow up in is unable to teach them the value of acquiring a good education.
[1] www.erstlingsausstattung24.de (n.d.) Hartz IV Empfänger – Antrag stellen auf Babyausstattung, was ist zu beachten? [Online].
Available at http://www.erstlingsausstattung24.de/hartz-iv-empfanger-antrag-stellen-auf-babyausstattung-was-ist-zu-beachten/ (Accessed 25 Jun 2018).