In a free market there are at least three principles of wage determination at work simultaneously. One is a tendency toward a uniformity of wages for labor of the same degree of ability. A second is a tendency toward unequal wage rates for labor of different degrees of ability-primarily intellectual ability, but also other abilities as well. And a third is a tendency toward the inclusion of discounts and premiums in wage as an offsetting element to the special advantages or disadvantages of the occupations concerned. The combined operation of these three principles helps to explain the full rage of the various wage rates we observe in actual life.These principles serve to keep the various ocupations supplied with labor ih the proper proportions.
If a free market would let the price of labor discover itself, we wouldn’t need a cabinet level department to make corrections. If you think employees have the ability to determine what they are willing to work for, and employers have the ability to determine what they are willing to pay, and the whole thing will just work itself out, well, you’re no Paul Krugmyn.