[blincoln]

> how can they be underpaying people (i.e. paying them less than competing employers) and yet people still choose to do it?

"paying them less than competing employers" being synonymous with "underpaying" is probably not a great assumption, although I'm sure it's the definition an MBA would use.

Most regular people are choosing the least-worst option in terms of employer. That doesn't mean that the least worst option is necessarily good, or paying fairly on an absolute scale. It could just be the job that means workers can handle one unexpected large bill before going bankrupt instead of not being able to handle any at all working for the next-worst option.

In other words, there's an imbalance of power between employers and the "regular person" workforce. The workers technically have a choice of where to work, but in many cases, none of the choices are good.

[duvenaud]

Right, but the employer they choose is presumably the one offering the best deal in the world from their point of view. Wouldn't it make more sense to be mad at every other employer for not proposing better pay, than the one that's offering the best pay for that worker?

[troupe]

> people are choosing the least-worst option in terms of employer

Doesn't that mean people are choosing the best employer that wants their skill set?

[lazyasciiart]

Yes, just like 6yo chimney sweeps were and children in sweatshops today are.

[AnthonyMouse]

There are two ways to get rid of child labor.

One is to ban it. This has some obvious drawbacks in weak economies, e.g. if the kid's choices are to work or to starve and then you ban them from working, they starve. It also interferes with kids being entrepreneurial. What's wrong with a kid mowing some lawns after school for spending money?

The other option is to create an economy strong enough that parents have no need to put their children to work instead of sending them to school, and then they don't.

What developed countries often do is to do the second one, then the first one, because that has some evolutionary fitness in politics. The more severe drawback of the first method is mitigated when the second one is in place, because then you're banning something people mostly wouldn't be doing anyway. Meanwhile politicians then get to claim credit for "solving the problem" by passing the ban, after it was already solved by something else.

These alternatives generalize to most types of labor restrictions (e.g. minimum wage). The reason only ~1% of people make minimum wage is that minimum wage is dumb so the rate is set low enough to minimize the damage done by the law, while still giving politicians something to claim credit for passing. What you actually want to do is the following: Use transfer payments (e.g. EITC/UBI) to help people making low wages, foster a stronger economy where people get paid more (e.g. make it easier to start a business), and lower the cost of living by preventing market consolidation and regulatory capture (e.g. enforce antitrust and don't allow restrictive zoning to constrain the housing supply).

Then you don't have to ban people from accepting less than a given amount of money because they would be under no pressure to do that to begin with.