The market for labour is a monopsony (the limited number of buyers relative to sellers make it a buyer's market). Just as suppressing price in a monopolistic market is unlikely to drive down supply and can actually increase overall sales, recent minimum wage increases have been found to have a net positive effect on employment.

> We present the first causal analysis of recent large minimum wage increases, focusing on 47 large U.S. counties that reached $15 or more by 2022q1. [...] We then find significant and larger positive employment effects, as the monopsony model predicts. We go on to document the presence of monopsony in the restau- rant industry. [...] The fast food industry’s monopsony power allowed it to accommodate large minimum wage increases and raise employment.

Source: https://irle.berkeley.edu/wp-content/uploads/2023/09/Minimum...