On the contrary, it's you who is confused here. The conditions you're describing - a surplus in supply for a range of market goods (mostly low-skilled human labour) is the result of the continued attempts of Western countries to regulate against free market dynamics. Removing the perverse regulations which caused this imbalance to arise would result in a short, hopefully not too harsh correction, after which supply and demand would again equalise across the range of various market goods in question.

It's similar to the situation of a hypothetical (or not so hypothetical really) society which decided to "help out" potato farmers by limiting the price of a kg of potatoes to $10. What would you expect? Potato production would skyrocket as people try and cash in on the boom, while potato buying would plummet as people switch to unregulated alternatives.

Imagine this situation continuing on, with more and more vegetables becoming price-controlled, all the while as the mass of unemployed farmers grows and grows (because the system supports people in their failure to be vegetable farmers with unemployment handouts), the conditions of the market become worse and worse, and the further distortionary actions (for example, police crackdowns on blackmarket vegetable sales) required to sustain the whole system become more and more extreme. When someone questions the need for the price restrictions, the average citizen responds:

"Vegetable markets would not magically become free markets (in the textbook-definition sense) if there were no regulations. People are forced to grow vegetables, there aren't enough buyers per grower to make the demand high enough to make the market fluid, and a single buyer can influence the price."

Of course, this really isn't hypothesis. Citizens of today's socialised, regulated countries are just blind to the destructive consequences which surround them.

One point you haven't covered, is that there aren't enough companies offering jobs to create free-market conditions.

Look at what happened with the no-negotiation agreements between Apple and co. in Silicon Valley. This was for some high-wage people, so we're not talking about a wage floor issue here.

Yet those agreements stil happened , because a single company can influence wages. In a true free market, there are so many buyers and sellers that no single actor can influence the price.

Not to mention that on a more theoretical level, there is a lower bound on the amount of money people need to live, so there _is_ a lower bound on wages, or at least a lower bound on wages. This is also a pretty good argument for basic income, because it would make participation really voluntary.