It's not the "alienation of workers" it's an "alienation from work". As far as I can see he's describing a psychological estrangement. Like for a hunter gatherer risk, toil and reward are correlated, there's an autonomy in ones work and as such the work becomes part of the self.
With the division of labor into different roles people stopped working for their own consumption and already became distant from their work as the value of work is no longer determined by themselves (by means of being useful to them), but is now the value that other people are willing to give for that.
But even then they were at least able to estimate the value of their labor via direct exchange. Whereas wage labor even further estranges them from their work to the point where labor becomes a commodity. You sell a part of your day to someone else. It's no longer your day it's the day of someone else and "you", your "freedom", your "life" is what happens after work, in your leisure time, during work you're not the master of yourself, but a slave to your employer. That's the deal with wage labor.
Like if your boss tells you what you have to do and if someone else determines the value of your work other than yourself, THAT is the alienation from your work. It's no longer an expression of yourself it's something you do to pay the bills.
Also as you focus on your self-realization, you might want to consider that previously an artisan craftsmen was the one to produce an entire product and put their name on it building their own brand, while nowadays employees build the brand of a company with little to no recognition of their own input. Like compare a chef to a McDonald's kitchen worker. One can present a menu and say "I've done that" while the other technically also just prepares a meal but has no ability for any personal creative input so the product is related to the company not the maker.
In terms of liberal democracy... Well first of all, Marx never even saw that in action. Like when Marx was around "liberal democracy" was a farce. Europe was still ruled by monarchies and where republican approaches and "liberal democracies" were practiced it was usually restricted to the upper class. It often took well into the 20th century for countries to have universal suffrage and there's apparently a quote from Marx where he argued that universal suffrage in Britain would be the most socialist concept in his time given that it would mean the rule of the proletariat as they would comprise by far the largest group.
He might have revised that position later on seeing that the poor and uneducated often enough vote conservative despite those parties acting most often against the interests of these peoples at least economically. So for all his materialistic critique apparently psychology is a factor that is important as well.
Also "liberal democracy" as a synonym for "welfare capitalism" is a very narrow redefinition of what all of these words mean. Like to call "capitalism" democracy is a pretty harsh misnomer given that capitalism usually creates a social and economic inequality that is more corrupt than democratic and that the democratic elements are in an active struggle to balance that and that "liberalism" is nominally derived from liberty, but actually is better described by privilege because liberty would be universal while many so called liberties are more of a privilege than a universal right.
And in terms of what you all a "welfare system" (vacation, retirement, paternity leave), those aren't even all that much of a welfare system, it's rather the opposite if you take them away you'd make that system unbearable. Like if you work without rest you'd destroy your body and your mind making work a net negative for you, and if you don't have paternity leave and have to decide between having children and being able to feed them you'd kill society and if there is no goal that you're working for but if work just keeps getting harder the more you've destroyed your body with it, the more likely people will rebel and destroy your system because it sucks. And that was something that was in the air even when Marx was around and often enough those measures weren't even introduced by socialists but by conservatives who feared they'd hang from the next tree if they don't improve the living conditions at least a little.
So again, depending on perspective that can be seen as incremental progress or as a pacifier to inhibit actual progress that tries to solve that problem.
Either way it's at least acknowledging the problem in that it tries to compensate for it.
On the other hand that:
My policies are based not on some economics theory, but on things I and millions like me were brought up with: an honest day's work for an honest day's pay; live within your means; put by a nest egg for a rainy day; pay your bills on time; support the police.
Sounds like slavery or even feudalism. "Know your place, work hard (for us) and we might grant you a modest life and leave you just enough to stay afloat in the next crisis. And support the executive powers that keep you in that condition"... Seriously THAT is by far more alienating from work than any compensating approach.
or the Vichy France slogan Travail, famille, patrie. (Work, family, motherland.)
For real? You unironically quote fascist France? These guys even managed to make "collaborateur" a slur, because they collaborated with the Nazis. Why not throw in "Arbeit macht frei" (=Work liberates) the slogan at the gates of Auschwitz as an example of a less alienating approach from labor.
Or are your serious in your attempts to sell the idea of Nazis and far right actors to sell slavery to the masses as "choice".
Remarks: I mean we still see a correlation between property rights and capital (social power to command people), as well as between wage labor and alienation from labor. That being said it's usually the lack of democracy and agency that intensifies that. The criticism of liberal democracy was most often that it wasn't actually democratic but rather plutocratic.