Isn’t unemployment less than earnings just about everywhere? I think the typical approach to unemployment isn’t really to make it like you never lost your job, but to provide just enough to get by temporarily.
Not less than their meager earnings. They were saying that they weren't making enough already and this was less, not that it being less than what some people make is bad. If you make the absolute minimum for survival, it shouldn't be less than that.
Negative cashflow doesn’t cause immediate death. Many (most?) people who suddenly lose income have a a negative cashflow in the immediate term (especially in consumerist societies) — many expenses take time to adjust. And people generally aren’t planning to be on unemployment for the long term anyway.
To not be catastrophic does not necessitate being good or even acceptable. Our systems of insurance can treat people better and we should want this because any of us can end up in that situation due to unforseen and even unforseeable events.