You're assuming that there's no unemployment. Eventually, wages will decrease to the point where it is no longer worthwhile for the individual to work, instead relying on unemployment benefit. This will cause the supply of labour to contract until the point wherein wages will rise so that it becomes rational to work again. This is the case even without unemployment benefit, with crime playing the role of benefits.

/Economist's Argument.

If you want, I could probably argue back from a utilitarian's perspective, if you want to keep the debate more philosophical rather than economical.