The only fallacy here is the idea that workers always make rational choices. While some workers may be willing to work for less than the cost of staying alive -

The only fallacy here is the idea that workers always make rational choices. While some workers may be willing to work for less than the cost of staying alive -- or otherwise compromise on their needs (not wants) -- in order to compete for jobs, we (as a society) should not allow them to work for that rate because it creates downward pressure on wages (forcing more rational workers to compete at an unsustainable price), and otherwise undermines the stability of the economy. This trope about the evils of regulation ignores that it is possible for the market equilibrium to exist below the cost of survival. Modern society has acknowledged that "survival" includes a number of things that haven't traditionally been included like healthcare, retirement, and more. Wages don't scale on a continuum, and there is a floor beneath which a worker cannot survive in a given economy. When these benefits aren't provided by an employer, they end up being subsidized by the government (particularly in the US). It is reasonable, as a society, to require that the businesses that participate (and benefit) in our economy uphold a minimum level of compensation for their employees in order to increase social stability and reduce overall reliance on government support.