[SilasX]

Well, for taxes, there's an obvious Scylla and Charybdis[1]: too high, and economic activity is scared away or pushed underground. Too low, and you can't afford public goods that make the place pleasant to live and facilitate economic activity.

I would like to see a similar model explaining what labor law accomplishes and how you know when the laws are being too strict. The problem is that the obvious answer ("so workers don't get exploited") isn't very satisfying: there's sort of an inherent barrier to not paying enough, which is competition for workers[2]. You would need to explain labor law as filling some role that isn't a simple matter of competitive compensation.

[1] My post on the importance of having a model that identifies both a Scylla and a Charybdis: http://blog.tyrannyofthemouse.com/2015/12/the-scylla-charybd...

[2] The typical argument is like, "look at [obviously poorer time]. They paid [obviously bad wage]. Now [after years of accumulation of capital] we mandate they don't do that, and stars above! They get good wages now." I don't find that satisfying.

[dragonwriter]

> The problem is that the obvious answer ("so workers don't get exploited") isn't very satisfying: there's sort of an inherent barrier to not paying enough, which is competition for workers.

Collusion among employers to keep wages down still happens. The combination of minimum standards plus anti-collusion laws function as a belt-and-suspenders approach to the problem (labor law has other purposes, too; so does anti-collusion law.)

[SilasX]

Sure. I can understand how it happens. But unless you want to list some of those other purposes:

A) That would justify anti-conspiracy countermeasures, not general "you have to pay them more" laws.

B) It would rather dubiously require a conspiracy along the rather huge number of low-skill employers. I can accept a conspiracy between McDonald's and BK, but across numbers indistries and localities?