There are, of course, empirical disputes as to just how rapidly wage increases will reduce that demand for labor.
The federal government has apparently (and foolishly) assumed that these effects will be small, and that the unemployed can somehow be better helped by government interventions into the labor markets. However, only a free market in labor is able to balance changes in both supply and demand, so as to reduce the incidence of unemployment. Government efforts to impose various minimum wages will, happily, have little adverse effect if the market wage is greater than the government mandate. But the same form of increase could have devastating effects on labor markets when the required wage is set too high relative to market wages. The number of workers eager to take jobs at these higher levels will be great, but the number of jobs available at that wage level will shrink. Unemployment levels will increase, and working off the books could increase.
The correct policy choice is strong deregulation of labor markets, which will spur higher labor market participation, albeit at somewhat lower wages. But once people get into the labor force, they can hone their skills in ways that will allow them to command higher wages. Government mandates can never lead to sustainable wage increases. Higher levels of labor productivity can. And this critique of minimum wage laws is equally applicable to other labor market interventions, including overtime rules, family leave statutes, mandatory collective bargaining, and mandated healthcare benefits that likewise distort labor markets.
It is therefore disheartening to observe that the dismal failures in the current labor market have led to renewed calls for further government intervention at both the federal and state levels. More specifically, progressives are calling for a two-pronged program that couples increased unemployment benefits with increased worker protections on all these key fronts. This agenda will only deepen the current malaise.