Do you really think welfare and other social services would go away (in the near future)? Seems like political suicide.
Social services still need to exist, but when you have Walmart holding sessions teaching their employees on how to make use of them, it is clear that the system isn't working as intended.
If more subsidies are lost, they are worse off, and thus, would rather stop working and get the maximum subsidies instead.
If minimum wage raise is higher than the subsidies lost, the cost of subsidies is "saved" by the taxpayer. but the businesses paying those wages might not want to pay more, so they might decrease number of jobs as a response. Therefore, you'd end up with more unemployed as a side effect.
Neither is a good outcome imho.
Subsidizing people who are out of work while all employees earn a livable wage is a categorically better outcome than having to subsidize everyone, employed or not, just because companies don't feel like paying a livable wage.
> If more subsidies are lost, they are worse off, and thus, would rather stop working and get the maximum subsidies instead.
This is an easily preventable issue that can be avoided by phasing out the subsidies instead of setting a hard cut-off.
The point is that the existence of welfare in the absence of a minimum living wage requirement is openly exploited by major, highly-profitable, corporations. Walmart and McDonalds are frequently cited, they're not the only instances.