There's some truth to what you're saying but the idea that you "give workers higher wages...(to create) a boom in spending", as if wages were some kind of perpetual motion machine is not accurate. If everyone was paid more for no reason, that creates inflation since it artificially alters supply and demand even though no new value was created in the labor market. Prices for everything would simply increase.
But even this, is a simplistic view. Inflation typically causes previously issued corporate debt to drop in price and newly issued fixed rate instruments to increase in yield. The problem with that is that increased yield cost corporations more money to borrow when they refinance their existing debt. Now companies are in trouble from two angles: One, a higher cost of labor due to inflation, and two, from higher costs of borrowing money. As a result, companies increase prices even further, which starts an upward spiral where wages can't keep up. By the way, this is the cause of the recent meltdown in US Stocks over the last 4-6 months.
If this process is allowed to run without any controls, you'll wind up with a hyperinflationary environment, similar to Argentina, where the dollars in your bank account are worth 40% less than they were the previous year. People wind up unable to afford anything beyond day-to-day goods like food and housing, consumerism, the main driver of most Western economies, slows to a crawl (You can't save for an iPhone when it costs double what it did last year), industries that rely on discretionary income go out of business, and the economy contracts and collapses on itself.
I know this is a bit dramatic, but it can and does happen. It can happen even without a trigger, but if you suddenly increased the minimum wage in a tight labor market you're basically throwing gasoline on the fire that is inflation.