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 You're describing how monopolies set wages. Small businesses pay fair wages because they can't exploit people. 

But capitalism kills small businesses and prevents their growth. 
 So then why would McDonalds ever have to raise their hourly pay to $17/hour. They are one of the largest corporations in the world.

I’m not trying to argue, I’m genuinely interested in hearing an alternative model of how the world works. 

How do you believe wages are set?
Why would McDonalds ever raise wages?
What do you propose in place of capitalism and would that work? 
 Why do I have to have an alternative? Why can't I just state that the term "unskilled labor" is a capitalist myth used to justify poverty wages? 
 Maybe you'll find this interesting. https://youtu.be/lILy_rV-CRM?si=YmEB8b0GRKTEBkG2 
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