To add to the excellent points made by the sibling comments, here's another reason why this logic doesn't necessarily apply: Consider that, as the wage at the

To add to the excellent points made by the sibling comments, here's another reason why this logic doesn't necessarily apply: Consider that, as the wage at the bottom end decreases, the supply of labor may actually increase, because people with low income may be looking for a second (or third) job, trying to work more hours to make up for their low income. In other words, the standard textbook picture of how supply and demand work need not apply to labor. When that happens, the market for labor may never clear despite falling wages. And then everybody loses - even capitalists would lose, because low wages means low income means low spending means low revenue for firms means low profits for capitalists.