Ok, that's the supply side of the labor equation. Now, let's look at the demand side. If you put in a price floor for labor does the quantity of labor demanded stay the same? The answer is no, the quantity of labor decreases. What will replace labor in the output function is capital.

Money will be reallocated from employees to machines. Sure, the guys flipping and wrapping the burgers will get paid more, but the person taking the order will be replaced by voice recognition software, or the orders will be routed through India. Resulting in fewer people working, but getting paid more.

The productivity of labor in this country is the highest of any nation. (I don't actually have a source for this, but many economists that I work with have stated this and have shown it to be true.) The reason for our high labor productivity is directly related to our high labor cost. As labor cost increases, productivity must increase. Makes sense, right? The costs of something goes up, the demand for that thing gores down, right? Well, if the cost of labor goes up, the demand for labor goes down, then. If we look at that alone, we'd would have seen negative GDP growth whenever labor costs rise, right? However, we don't see that. My theory is shot to shit, then!

Well, not quite. Since labor costs have risen, but firms still want the same amount of output, we need to reallocate some money from labor (quantity of labor demanded) to machines (capital) or computers (technology) to increase productivity. This also means that the marginal product of labor must too rise. Meaning, that in order to buy an additional unit of labor (hire someone) their marginal output must be more than their marginal cost. Again, you need more technology or capital.

We can surmise this by looking at a simplified Cobb-Douglas production function.

Y=ALK

Where Y is output, A is total factor productivity (we'll just call this technology), L is labor, K is capital. Output equals the product of technology, labor, and capital. (Yes, I am ignoring the elasticities of labor and capital, but we're keeping it simple.)

Or you could just assume the people who run McDonald's know more about this shit than you. Which is basically what I do.