Well, do they? Is the effect significant?
I guess the thinking is as follows: A guy getting unemployment benefits of say, $400 a week is not going to take a job that pays $300, is he?
In fact, the job will probably have to pay more than he's getting, because why bother working to make the same money he gets for free?
So that for those people on unemployment, a wage floor is definately there.
Will people who don't get benefits be willing to work for less? Possibly some of them will. But of course there are fewer such people than there would be if nobody got unemployment benefits. So that the supply of workers willing to work for less than $400 a week is reduced by benefits.
Will this force wages up, or cause busineses to close down, or not hire as many people? I think the usual answer is the latter.
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