If wages were left to market mechanisms, there would be no need for a set minimum wage. The fact that there is a minimum wage, and that many earn just that, is a clear indication that the market price of labor isn't negotiated between parties of equal strength.
To be clear: regardless of who sets the minimum wage, there is a minimum wage, and you aren't free to take a job under that level. To be honest, it would seem easier to "control" the union of which you are a member, than to adjust the minimum wage. It's just two organizations where one (congress/parliament) feels larger and further away.
A huge drawback of a single minimum wage (not differing between different parts of the labor market) is that it will spel trouble for companies when businesses on different parts of the cycle would be treated the same.
As an example, here companies relying on export such as truck makers are hugely sensitive to drops in global economy, and unions will accept frozen wages to limit layoffs as soon as bad times hit, which it does early in the cycle. Meanwhile service jobs or the public sector may be at a completely different point in the economy cycle, with perhaps 1-2 years before bad times hit. To use the same wages in both parts of the labor market would be a rather blunt solution.
I agree with you that a minimum wage can be beneficial in industries where wages are not negotiated between parties of equal strength, for example, the giant Walmart that employs half the people in town. In this case, economic models show that a minimum wage could actually increase employment by pushing wages closer to what the competitive wage would be.
However, I'd argue that in many (if not most) industries this is not the case. In fast-food and software, for example, the workers are free to move between employers at will, giving the workers significant power to negotiate.
I remain skeptical that governments (or unions) are smart enough to set the correct minimum wage without going under or overboard, which would hurt the unemployed and consumers. A better solution, I think, is a basic income system that ensures nobody is in poverty. http://en.wikipedia.org/wiki/Basic_income
To be clear: regardless of who sets the minimum wage, there is a minimum wage, and you aren't free to take a job under that level. To be honest, it would seem easier to "control" the union of which you are a member, than to adjust the minimum wage. It's just two organizations where one (congress/parliament) feels larger and further away.
A huge drawback of a single minimum wage (not differing between different parts of the labor market) is that it will spel trouble for companies when businesses on different parts of the cycle would be treated the same. As an example, here companies relying on export such as truck makers are hugely sensitive to drops in global economy, and unions will accept frozen wages to limit layoffs as soon as bad times hit, which it does early in the cycle. Meanwhile service jobs or the public sector may be at a completely different point in the economy cycle, with perhaps 1-2 years before bad times hit. To use the same wages in both parts of the labor market would be a rather blunt solution.