It's a rational economic decision on the part of the slugs, I have to say. Not one I regard as ethical myself, but certainly rational. This situation is what happens when Socialism doesn't immediatley drive the plane straight into a mountain* and manages to provide benefits the citizenry regards as sufficient...they have no reason to work any harder (Or at all, in this case) for more.
*Of course, this kind of rational microeconomic decision eventually does lead to the economy hitting that mountain on a macroeconomic level, it just takes awhile.