If we just look at supply and demand, it's a model where a business has one pool of humans for labour, and another pool for customers.
In reality, it's an incredibly complicated web where the labour associated with one business are the customers of another.
Changing the way the money is distributed within that web does not necessarily follow simple laws of supply and demand.
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Update: I actually explain this to my kids. The money a barista earns making me a coffee goes to Netflix, or Uber, or Apple. They in turn buy PagerDuty. PagerDuty pays me. And they pay taxes. Which pays for our education.
Raising their income doesn't mean that the money just disappears from the economy, to everyone's detriment. That's actually the great thing about giving more money to labour. The amount of that money that goes to offshore tax havens is negligible.
Compare and contrast to Corporate Welfare.
It's not an exception, but there are other concepts in economics that apply as well, like the multiplier effect.