I'll accept the first proposition: the people who were earning below the minimum wage before, who keep their jobs, have more money to spend. (Limitation: I accept the argument that says if they are producing significantly more than they are paid, they will eventually be paid more anyway, so the gain is both temporary and small.)

But balance against that against the fact that those who are laid off, whose businesses close down, or who are never hired in the first place, have much less money to spend.

Is the first force is bigger than the second, and hence businesses would see more demand? You'd have to prove that to me. I don't have evidence or a strong opinion either way, but I consider it unlikely.