If the welfare state is a pyramid scheme, then so are all economic structures. Perhaps you're heard that productivity of individual workers increases over time...
And also, the individual productivity has stagnated over the last decade.
There's a limit to how many divs a front end dev can insert per hour and how many toilets a plumber can install per hour and this hasn't gone up lately.
Also, wages have not kept up with an individual's increase in productivity as all the gains have been skimmed by the top shareholders, not the workers.
So, please don't confuse the rise in stock prices of the bull run in US in the last decade with the rise in wages as a lot of workers haven't felt it.
The value a plumber creates by installing a toilet depends on the context of the installation.
Much of the gains have also been skimmed by land, many of whom happen to be workers.
I think that's part of the reason there hasn't been a strong push to for systemic change. You really have three main classes: capital, labour who happens to own some land (through homeownership), and labour without land. The second group is majority [0], and they've done mostly okay (at the expense of the third).
[0] - Or, if they're not the majority, they're still more active and involved in politics, which makes sense, as they've made a very large investment, and would like to see it grow (or at the very least, not lose its value).
In regards to your comment about the welfare state being a pyrid scheme, everything. It's why a shrinking population can keep a welfare state solvent.
> how many toilets a plumber can install per hour and this hasn't gone up lately.
Not true. Modern installation systems like are now universal in new buildings in Europe mean toilet install rates have indeed gone up.
> please don't confuse the rise in stock prices of the bull run in US in the last decade with the rise in wages as a lot of workers
Who's doing that?
Automation helps increase productivity per person and reduce the necessary working population to non working population ratio, but there is no natural law that automation can progress as quickly as it would need to in order to meet the expected quality of life in the face of declining proportions of working age populations.
So do house prices and taxes. Actually house prices have gone up way more than wages, eg https://www.newstatesman.com/politics/2021/05/how-uk-house-p...