1. The bureaucrats administering the system because the more complex and insan the system is, the more bureaucrats you need.
2. The politicians who can promise $X of benefits to N people while knowing all along that due to the complexity of the system the actual cost of the program will be well under X*N due to failure to claim the benefits.
3. Companies that can now hire workers for less than their cost of living because they know they can just make it up out of government benefits.
And it hurts, of course, the poor people who depend on these programs. But that doesn't matter politically, because these people are mostly not smart enough to even figure out how they are being screwed. Whereas the people in 1-3 above are absolutely smart enough to figure out how they benefit from the current system and they vote and donate accordingly.
The idea proposed by these 'free market types', that somehow people working there below sustenance salaries 'deserve it' - that the cost of labor needs to be essentially subsidized just doesn't make sense to me.
Practice what you preach - either pay the wages people need to get by, or close down.
The sane way to approach a system like this is just UBI + socialized healthcare but I think we'll approach labor collapse before we see movement in this direction by out of touch bureaucrats.
Sure some folks would be fired, and their jobs automated, but they could be redirected towards better paying opportunities.
If all else fails, then the money saved by such approaches could be used for welfare. It's just putting things from one pocket into the other for the government.
As things stand, these corporate subsidies are just for enshrining inefficiencies in the system.