> No one is going to say "I was willing to work for $6/hour but not for $7/hour".I am not sure this is a correct interpretation of what supply actually means. For all intents and purposes, supply is the people willing to do job for less. If minimum wage is $7/hour, there is nobody going to say "I will do it for $6". If you, a business owner, want to pay less than $7/hour in this scenario, what supply do you think you are turning to? There isn't any! You have already hit equilibrium (where supply meets demand) at the level of minimum wage.
Someone who wants $12/hr. for a minimum wage job is not supply in that market. Supply isn't all people who are willing to work just as demand isn't all people who want something. If you have $100 in your pocket and say you want to buy a new Ferrari with it does not mean you demand a Ferrari. Demand requires that you be willing and able to offer a price that actually gets what you want.
> You would expect it to decrease labor demand because people who would be willing to pay $6/hour for a certain job might not be willing to pay $7/hour.
That can be true, but minimum wage work is often providing an inelastic service. People aren't going to stop eating because minimum wage for agricultural workers went up. They'll just accept the higher price. What choice do they really have? Eating is somewhat essential.
It is true that the definition of demand says that all else equal, a higher price results in less demand, but in the real world not else is equal when the price rises due to minimum wage increases. A higher price does not always mean less demand.