In an ideal spherical cow world, having no minimum wage would work exactly as you describe. In the real world, that's you how get slavery. For many reasons, not everyone has a choice to turn down a $1/hr job.
But note also that there are people one might be willing to gamble on employing at $12/hour but that don't offer a positive return at capital at $15/hour.
I think minimum wage laws are important, but that reducing the supply of labor will do more to push up the wages of the lowest earners.
Right now the problem is in the power dynamic between companies and employees - the dynamic is very unbalanced in the companies favor. In "Bullshit Jobs" Graeber compares the current system to a Dom-Sub relationship with no safeword for the "fake-competitive" industries that are not unionized.
UBI is the safeword.
This is not some ideal spherical cow world, this is how literally the entire labor market works except for the mystical bottom that the government feels they have to be involved in. Why else do you think FAANG's pay so much money? Its because they want to attract the best talent.
When we are talking about minimum wage, you need to consider the people with the worst talent. Think sweatshops in China, construction camps in Dubai, prostitutes in the US. Not Google or Facebook employees.
As for sweatshops in China, these are the growing pains of a developing economy. The work conditions there suck but I bet they are better than being bent over in a rice field all day. You are also rapidly seeing this change as the economy becomes more developed there, even in the face of an oppressive government.
https://www.wsj.com/articles/china-is-working-its-way-up-fro...
The construction camps in Dubai is about government corruption. They lure in overseas workers then take away their passports so they can't leave. Not exactly a free labor market.
Again prostitution in the US is not a free labor market because of government interference. If you go to places where prostitution is legal, the girls there make pretty good money.
Most of the areas where you can point to the worst employment situations is because of government interference in a market place.
In some areas an Amazon warehouse job is an exceptionally good job. I grew up in a place where one of the best job you could get was working at a Walmart distribution center. Basically like an Amazon warehouse but the whole this is a freezer.
Also the government can't and shouldn't try to govern bad choices away from people. This would lead to a very authoritarian society.
https://www.nlrb.gov/about-nlrb/rights-we-protect/the-law/em...
> Unions are not allowed to negotiate benefits and wages exclusively for their members.
Parent is talking about "closed shops" where a union uses its bargaining power to ensure the employer will only employ people represented by the union. On the one hand this prevents the free-rider problem you mention. On the other, this is coercive and can erode employees' ability to negotiate about things important to them.
It can also be inefficient-- I've been in workplaces where I got in trouble for moving a desk in my office a few feet, because moving furniture was a closed-shop union job, and I wasn't a member.
The usual argument for this is that while there is some efficiency gained in trying for a pure labor market here, the externalities can be brutal. So the reason that the government gets involved in the lower end is that typically they are the ones that have to deal with the fallout when things aren't working well. There are other approaches, but for whatever reasons many places find min wage more politically acceptable/expedient.
No, they would cooperate and set an informal maximum wage to replace the minimum one (or more accurately, they would lower the already informally established maximum wage.) This would be a win-win for both businesses.
It's not a coincidence that all low-wage jobs pay between 0% and 25% over the minimum wage, and it has nothing to do with labor demand. It's because a bidding war is no good for anyone, and because having the best low wage employees will not improve net revenue more than always paying as little as possible. The idea that the Burger King paying $22/hr is going to drive the McDonald's paying $14/hr out of business is a libertarian fantasy never borne out by reality.
> and it has nothing to do with labor demand.
If not having an employee costs you $30/hour in revenue-- your desire to avoid a bidding war won't prevent you from making an offer at $22/hr if it's necessary to fill the slot.
It has everything to do with labor demand (and supply). Collusion (formal or informal) between loosely coupled, adversarial entities breaks down under pressure.
And not just immigrants. Anyone with an abusive parent or partner or any situation where one person holds power over another.
Hence "this is how you get slavery".
If there were no minimum wage, you could put the person on payroll and be completely legal in your actions, allowing the employer to exploit unknowledgeable employees.
All of this bullshit free market fundamentalism relies on many nice assumptions - one being that there is plenty of good, high-paying work to go around. The actual fact spelled out in a hundred different ways, from wages to market conditions to books like Bullshit Jobs, is that the economy doesn't need nearly as many workers as we have people particularly in low wage jobs that don't require much training. There is much more supply than demand. Its perfectly possible that if McDonalds paid $1/hr, their competitors would ALSO pay $1/hr. In that situation someone with little skills would have a choice of 1. making $1/hr 2. making $0 and starving. These are the conditions 50-60% of the world works in. We've already seen collusion to keep wages low in technology, not to mention other industries and times in the past, no doubt it happens and can happen again.
As is usual, every time someone points out a bad situation, you say its "not really a free market". So its not, most markets aren't ideal "free markets". Employers can collude, information asymmetries do exist, power imbalances are real. There are literally zero "free markets" in the world. They don't just arise naturally. Even with all the intervention we have, I have yet to see any market where there is no information asymmetry or imbalances. Its a fucking idealized model from Econ 101, not the state of reality.
This kind of thinking is fundamentally un-empirical. It starts with a theory and insists that the world conform to it rather than looking at the world and examining which theory really does explain it best. In this world I would simply refuse to acknowledge the existence of non-spherical objects as a non-spherical boulder rolled down a hill and killed me.
lol - then you go on to complain about free markets? China is NOT a free market!
I don't care how many fast food joints colluded, no one is going to work for $1 an hour. Heck with all the COVID bucks floating around I see fast food joints advertising $15 an hour jobs and STILL not getting any takers.
Your position is utterly nonsensical. This isn't the turn of the century. Workers have never had more mobility or information. If anyone tried to set up a "Company town" in todays economy it would be empty from day one.
Several replies are addressing your wrong points but I had to bring this up: https://www.npr.org/sections/alltechconsidered/2015/01/16/37...