Because the suppression of wages for labor is a rent seeking behavior.  In English, this means that in order for the part of the pie going to employers to increase in size, the size of the pie must shrink.

It's the mirror image of what we've been told is happening.

Now, typically, the story that's been told over the past 40 years is that demanding a living wage is anti-social, because increasing the slice of the pie going to workers means shrinking the pie.  There's even a neat little graphic that can be used to demonstrate the concept.

In the case of the labor market, workers are producers, while employers are consumers. I've mark the producer surplus in blue, and the consumer surplus in red.  So think of the blue as the wages paid to workers, and the red as the profits made by companies.

Now if the market is providing the maximum benefit to society, it should look like this.

But, the story that we've been told is that because wages are inflated by minimum wage laws and unions demanding wage hikes, what we get is something like this.

So what you see is that the red area shrinks.  The purple area represents money that previously went as profits to companies, but is now paid out in increased wages.  But the real trick is in the pink and light blue areas.  Because workers and unions have engaged in rent seeking they have denied the economic benefit of these areas to society, and have reduced the total amount of labor consumed.  So basically, increased wages have increased unemployment.

But, the truth of the Anglo disease is the mirror opposite of this.  Part of the money made by the financial sector is just total bullshit. But, another part of the disease is rent seeking behavior..... by capital.  By employers supressing wages. So we get this.

So again we see that employment is reduced.  In this case because the reduced wages fail to draw people into the labor market, and the same social loss occurs.

The big difference is that in this case the purple area is consumer surplus.  This is money taken from workers wages and shifted to employers profits.

So yes, the economy is suffering from rent seeking behavior, but the businessmen pointing to labor are projecting their own deficiencies on people who actually work for a living.

The bottom line is that a redistribution of wealth has shrunk the economy.  But it's been a redistribution of wealth from workers to employers. From labor to capital.

Inequality is inefficient.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg