Meanwhile, in the real world, people take jobs for all sorts of reasons, and often do not have the luxury of choosing freely. The whole reason we have labour laws in the first place is because the free market has shown, again and again and again, to be completely inept at guaranteeing fair tratment of workers.

I know that with a purely US perspective it's hard to see the benefits of labour protections, since here jobs are either unionized into stupidity, or completely at-will. There's no middle ground, and then it's fair to come to the conclusion that it's all crap. However, there are plenty of countries outside the US where job markets have a healthier balance between protections for workers and company interests.