This is a topic of lively debate amongst economic historians (which tends to mean several year gaps while everyone goes and digs through archives).

The latest paper I know of is Gallardo-Albarrán and de Jong (2020), who have put together various measures of real wages, working hours, health and income inequality. They estimate that worker's welfare in 1850 was 22% higher than in 1760, and see two broad periods in this, from 1760 to 1800 where working hours and income inequality increased but so did life expectancy (by 5 years), and 1800 to 1850 where real wages rose, income inequality fell slightly, and working hours, after rising until 1830, declined.

Note that the focus on real wages means that they don't include welfare paid through the poor rates, which was a significant form of welfare in 18th century England & Wales. George Boyer, in an article for the eh.net website on the poor laws writes:

Real per capita expenditures more than doubled from 1748-50 to 1803, and remained at a high level until the Poor Law was amended in 1834 (see Table 1). Relief expenditures increased from 1.0% of GDP in 1748-50 to a peak of 2.7% of GDP in 1818-20 (Lindert 1998).

Boyer also describes a relative shift in aid towards recipients who were aged 20-59, rather than older, and to men. This may explain rising life expectancy without a rise in real wages from 1750 to 1800.

This sort of complexity is why I don't tend to find 'capitalism' useful as a term for historical analysis.

As for masters who treated workers like dirt, I don't know of any research indicating that pre-18th century employers were noticeably nicer. Startlingly, Scottish coal miners (colliers and salters) were legally bound to their workplace by a 1606 Act "Anent Coalyers and Salters", until 1799 (following an earlier reform act being passed in 1774). While that's a fairly specific regulation, the fact that it was passed and lasted nearly 200 years makes me skeptical about the general employer attitude to their employees. And wage labour was widespread well before the industrial revolution, Penn and Dyer (1990) estimated:

At least one-third of the population of late medieval England gained all or a part of their livelihood by earning wages.

So many people would be employed one way or another.

All this said, the debate about the living standards of the working class isn't at an ideological impasse, there's a lot of argument but there's sufficient data involved that it seems to me likely that an overall consensus will be formed one day (subject of course to the normal considerations about the conditional nature of all such knowledge).

Sources

Boyer, George. “English Poor Laws”. EH.Net Encyclopedia, edited by Robert Whaples. May 7, 2002. URL http://eh.net/encyclopedia/english-poor-laws/

Daniel Gallardo-Albarrán, Herman de Jong, Optimism or pessimism? A composite view on English living standards during the Industrial Revolution, European Review of Economic History, https://doi.org/10.1093/ereh/heaa002, copy at https://academic.oup.com/ereh/advance-article/doi/10.1093/ereh/heaa002/5827898

Simon A. C. Penn, & Dyer, C. (1990). Wages and Earnings in Late Medieval England: Evidence from the Enforcement of the Labour Laws. The Economic History Review, 43(3), new series, 356-376. doi:10.2307/2596938, https://www.jstor.org/stable/2596938?seq=1#metadata_info_tab_contents