Firstly, not many people will want to live a whole life with the measly income from the social welfare. Most people will want to progress, and to progress is to get a good career.
Secondly, I find a situation where having social welfare for unemployment will be good for both employer and employee. Assume my company want me to take on a new responsibility which will involve certain effort to prepare me for it. At that moment, I am already looking for other jobs outside and once I found it, I will leave. If I take up the offer and leave soon after that will be a waste of time and effort spent on preparing me for the new role. But I can't tell my company that. Who will tell their company that? Until I found my new job will I be comfortable enough to tell my company right? Or when my company tells me about the plan for me, and it's not agreeable to me, I can't tell them yet either. What can be a good reason for rejecting a work assignment? I can only accept it and silently start looking.
If there's social welfare, my concerns will be gone. I can tender my resignation when I feel like it and look for a new job. If I can't find one before I leave the company, there's still income for me while I was hunting job.
I am sure there are other benefits to social welfare. And there will be bad points as well. But if there's benefits, then it's worth more investigation and try to streamline it enough to be useful.
Ideas that are not perfect are not bad ideas.