That is an extreme example, to get the point across. These workers didn't agree to your offer of $1 out of choice, they agreed because they have no other option. This is where governments need to step in and create laws and regulations so a small group of people do not screw the majority of the population.
We do not live in a jungle where the strong survive the weak starve. Not everything should be tied to supply and demand. A huge portion of jobs done by humans today will be done by robots soon (for example, truck driving). What happens then? You don't pay even that $1, because you don't even need humans at that point to drive your trucks. You just let millions of truck drivers starve? These are not pure economics problems, these are societal problems. If not handled correctly and early, we'd have bloody revolutions on our hands.