Classical Economic theory predicts that an increase in the Minimum wage should lead to unemployment. If the minimum wage(Wtu) is placed above the equilibrium We, demand for labour falls creating unemployment of Q2 - Q1
In a survey amongst economists by Dan Fuller (2003), he found 46% of Economists agreed with the statement that “minimum wages cause unemployment amongst unskilled workers” only 24% disagreed with this statement. 
However, the experience of the UK is that increasing the minimum wage has been compatible with falling unemployment and rising levels of employment.
- The minimum wage was introduced in the UK in 1999 at £3.30.
- As of October 2007 the minimum wage for adult workers is £5.52. (It will rise to £5.73 by end of 2008)
- There is a development rate for workers 18-21 of £4.60
- For people under 18 (not of compulsory school age) the rate is £3.40
- Source: National Minimum wage HMRC - 
by 2008, UK unemployment has fallen to 1.61 million or 5.25%. Employment rates have also increased to 74%. The claimant count method is even lower at only 793,000 UK Unemployment stats
The experience of the UK is that a 67% increase in the NMW has reduced unemployment and increased employment. The UK is not isolated, in the US, studies have also show a link between increasing the NMW wage and negligible effects on employment. E.g. David Card and Alan Krueger, in their 1997 book Myth and Measurement: The New Economics of the Minimum Wage
Reasons Why Higher Minimum Wage has Led to Increased Employment1. Strong Economic Growth. In period of economic growth, firms employ more workers as there is more demand to produce goods. Economic growth in the UK has averaged 2.5% since 1999
2. Monoposony Power. Classical theory assumes labour markets are competitive, but, in practice workers often face employers with buying power. This means firms are able to pay workers less than the market wage. Therefore, when a government artificially raises wages, firms can actually afford to pay them. It is argued minimum wage legislation is similar to anti trust regulation. [see: Monopsony and Minimum wages]
3. Increased Productivity. A study by David Metcalf  found that firms responded to increased wages by increasing the productivity of workers, especially in the service sector. This is important because it suggests that higher wages can actually help increase productivity in the economy.
4. Lower hours. Rather than make workers redundant, firms have reduced the average hours worked. This is related to part 3, firms try to get higher productivity in a shorter time, so they can afford the minimum wage.
5. Pass on Cost increases. Because the minimum wage affects all firms, it is easier for the cost increases to be passed onto consumers. e.g. because all cleaning firms have higher wage costs, they can all increase their prices. If the wage increase just affected one firm, they would become uncompetitive. (note: the rise in prices has not led to significant inflation in the UK)
6. Avoidance of Minimum Wage. It is uncertain to ascertain the extent of this problem, but some firms have circumvented the minimum wage legislation by employing immigrant labour and paying them lower wages. It also makes it more attractive to employ young workers.