True enough, but minimum wage increases can capture economic surplus to labour. So if there is an increase in economic surplus due to increased efficiency (say

True enough, but minimum wage increases can capture economic surplus to labour. So if there is an increase in economic surplus due to increased efficiency (say warehouse allocation improves to require 50 workers instead of a 100), then normally the warehouse owner gets all (well, presumably they could use that to lower prices or something as well) the surplus from that. A minimum wage increase can move some of that surplus to labour. So if productivity rapidly rises over some period of time, it makes sense to increase minimum wage if you want some of that to go to labour. The idea being demand won't drop that much. We do know that productivity has been rising quite a bit recently, but real wages are stagnant. This may mean that more of the surplus is going to capital. Given all that, minimum wage increases will probably not lead to diminished demand overall (it's possible some industries don't have the capacity) unless they eat up more than the surplus.