One thing I don't fully understand is why the equilibrium for the demand/supply of labor is not enough to live on. Why does the hiring party get to be more picky (and thus pay less) among potential employees, while employees get to be much less picky in their job? Some theories:
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Maybe there's not enough 'natural' competition among companies at low wages? Just, not enough jobs in general offering entry level positions. If more jobs opened up, employees could put way more pressure on companies, and wages would naturally increase to be competitive.
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Basically, I'm operating under the assumption that the need for a minimum wage is abnormal. The idea that we have to literally ban the option for consenting adults to agree to certain types of exchanges means that something else is very wrong inside the system.
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My priors make me want to guess that regulations that make it difficult for new businesses to pop up, or tax burdens that make it difficult to hire more employees, and lobbying'd laws from corporations that suppress competition, are the real culprits for low equilibrium.
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Spaceman Spiff
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I think this is the right answer. The market is flooded with low skill workers, so they turn into commodities. Why pay $100k to hire someone with skills that everyone has? So the wages race to the bottom because low skilled workers are competing with cheaper low skilled workers.
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However, if the employees' skills are less common and more valuable, they can trade those for better wages. In the same way, companies can have competitive advantages to avoid being undercut by cheaper competitors, so do people.
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low wage employees can earn a living in many cases—but free will is a “problem.” you have to avoid debt, avoid health problems (via diet/exercise), live within means, and gradually learn skills that increase earnings public education trains you in the opposite direction tho...
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also it might be that not-enough-to-live-on could be considered “equilibrium.” in a natural environment, some animals thrive and others starve. it might be that a state where everyone thrives is highly unnatural
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Low wage jobs tend to be unskilled and parts of larger teams. Hiring one employee vs. another likely won't affect an employer's productivity in a major way. A potential employee has nothing to bargain with. They're not bringing valuable skills or clients or anything another can't
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Meanwhile, the person applying for the low wage job likely REALLY needs that job. So they have less incentive to turn down an offer. And once they do have the job, they have strong incentives not to quit. So the employer holds the cards.
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