[czarit]

It is absolutely accepted in microeconomics, where one can assume that preferences are exogenous to the model (that is: not affected by changing the model's variables).

In macroeconomics it is not so simple, because the effects of a higher price for labor are felt all over the economy, leading to feedbacks that might increase overall employment. The Ford wage increase to increase demand for Ford's products is often cited - because there is a multiplier effect from economic activity even a single firm can theoretically benefit from handing out more money to its employees.

There are also arguments from near term versus long term. In the long term, economies with no access to very cheap labor feel more pressure to robotize production, leading to higher productivity and more production overall, and also might lead to a better educated workforce by simply excluding below-minimum-wage productive labor from getting any jobs, and therefore push some of them to school. Those are short term costs that have proven to lead to long term gains.

But I do also think it's not very common to assume that higher minimum wages will lead to a net increase in employment. It is more common to argue that it will lead to a better outcome (for some definition of good) in the aggregate, _even if_ it might lead to some unemployment.