How will competition in the labor market drive up wages?

[salvorhardin]

4. Here's the thinking...

The thinking is that stiff competition in the labor market means that for any given job category, the subpar will be driven out, thus leaving only the competent and excellent. Because employees know employers know they're getting the cream of the crop, they can demand higher wages, and employers will happily pay for the best.

Obviously, it doesn't work. What happens is that employers then readjust their notion of what makes an exceptional employee, then ratchet up the job requirements until they can claim a shortage of skilled workers. Since there's now a shortage of skilled workers, they're free to pay less.

This is why unions still matter. Employers have disproportionate power over employees. Unions help bridge that power gap.