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I don't intend to make this a big debatey post. I wanted to respond to a couple things specifically, but felt that if I didn't go line by line, it wouldn't work that well.
 Originally Posted by rong
I guess my issue is the ability for people to fall through the cracks of an unregulated world and get stuck in the arse end of life.
Would you feel the same if you believed that regulations are responsible for increasing the amount of people who hit the arse end of life?
For example, let's assume no min wage or employment regulation.
Min wage would be the minimum for someone to get by.
I think we have a false narrative. You know how simplistic use of data by the media always shows that even the highest minimum wage in the US is still not enough to "get by"? Yet those receiving minimum wage or below it are "getting by".
So for example, a girl gets knocked up with no family or partner to support her. She needs to work to feed/house/clothe the kid.
That means she will accept a wage that allows her to just about exist and take care of child. Shed also work every hour available to do this.
So the minimum wage (and I mean the lowest that anyone would take) is underpinned by this desperation.
That's how a market-set "minimum" is. We have a lot of these already. Like a good computer programmer has a market-set minimum wage range. Nobody can quantify exactly what it is at any point in time, but it's definitely a bit higher than any known mandated minimums.
I might be a little confused on what you're getting at, because what you've said here seems to be an argument against your thesis of needing a "safety net" mandate.
This won't include spare cash for self improvement and education. Why would it? The market will look for the lowest wage it can pay and pay it. So this individual would be stuck in this rut for life.
I'm happy you said this, because it opens the door for explaining why economists don't think this is the case.
I guess I'll hit the three different things you said specifically:
This won't include spare cash for self improvement and education.
It always does. Nobody's net inflow and outflow are absent of fluctuations or inefficiencies. It can be astounding what people think their necessary spending habits should be. That said, this point isn't terribly important, since I'm trying to focus on macro instead of micro, but I figured I'd mention it just for comprehensiveness.
The market will look for the lowest wage it can pay and pay it.
It will also look for the highest wage it can pay. I get what you're saying, and what I'm saying here is a little contrarian to that, but I want to make the point that market behavior is multi-faceted. If a business is looking for certain types of workers yet it is unable to get those workers, one of the strategies to aiding in getting those workers is to raise the offered wage. Combine this sort of competition with the marginalism that businesses already operate with, and you get a situation where the wages are also as high as they can be. Saying the market shoots for low wages or me saying it shoots for high wages is missing the ball, because what it's really doing is shooting for optimized wages.
So this individual would be stuck in this rut for life.
If you only pay attention to one thing in this post, make it this part. I used to completely agree with you on this. It's super standard populous narrative, and it makes sense. But I don't think I have ever seen an economist say this, and I have seen them say the exact opposite.
The "rut" that people get in, is unemployment. The primary tool that people have to increase their skills and their income is what they gain while working. The popular belief is that academic education is the best way to increase skills and earnings, but it is second to work experience. Education is very valuable, but work experience is far more efficient. It's ironic that we're sending a bunch of low-skill people to school when the most cost-effective way for them to get skills is to instead send them to work. It doesn't even matter where you're working. Every job I have heard of includes the ability to have your wages raised, to move into higher positions, or develop skills to move diagonally. Probably the only aspect of this that education is better is efficiency in breaking through some wage ceilings, but by that time, we're far away from any sort of "arse end fallen through the crack" thing.
Because of this, all "safety net" policies that disincentivize work, regardless of the wages, have a deteriorating effect on the skills and earnings capabilities of the poor. If somebody takes a "bare minimum" job, they are learning new skills, and those new skills are what turn that "bare minimum" into a surplus. The macroeconomic rut is unemployment, not low wage employment.
My personal theory is that the major subsidization of education is the foundation for why we have this problem in the first place. Back when the government didn't intervene in college or local schools, it was commonplace for young people to enter the work force and expect to remain in it until they would retire. Their wages, skills, and job descriptions would increase the whole while. But today everybody is over-educated, over-subsidized, and people are doing "entry-level" work ten or twenty years later than they normally would, after they've already established the expenses of adulthood.
This is just one random example of how many people could get stuck in this situation.
With no state to support those who fall on difficult times through circumstance or one poor decision a whole bunch of people could end up here. Having that safety net reduces the chance of this happening. I think that's important.
So I agree that the state needs to be reigned in and regulation reduced. But I always want a safety net, and want health care and some form of subsidy for those that screw up at a bare minimum. And still stand by education, defence, policing to be part of it.
I guess utilities is a step too far, but infrastructure such as roads and rail networks should be part of it.
FWIW I think public education is the bane of our existence. I've always wanted to make a mega post on it, but I don't think I ever will. But to give a little taste, public education does so much wrong for us, from anywhere from creating a ridiculous sub-culture mentality in youths that influence us all as we grow, to wasting enormous funds and time on educating people on things they will never use, to making it impossible to work in many fields because they only hire grads because of over-supply.
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