What if they elect those who want to legalize pedophilia? Morality trumps democracy, and a third party, government or not, has no business interfering in transactions and private contracts between two others.

The "market decides" what labor is worth. Lots of people don't like that outcome, so they try to circumvent the market by imposing a minimum wage, while refusing to recognize that unemployment is the market's reaction.

As for your vision of the market deciding, with areas having to set or raise a minimum mage in order to prevent workers from fleeing to other regions... NEVER HAPPEN. That's why we have federal & state minimum wage, to protect it from competition. First of all, no one would set up shop in an area that would force them to raise their labor. Much more likely than workers crossing to other regions to make minimum wage (commuting and relocating aren't exactly easy for poor people) is businesses setting up where they don't have to worry about the laws.