In a free market, commodity-level jobs will only happen at commodity-level wages. But it's not a free market, because of minimum wage laws. If you set the minimum wage too high, the number of baggers may go to zero, not because of supply but because of demand - the price is higher than any grocery store is willing to pay.

You can argue about the need for the minimum wage laws. You can argue about the morality of paying a living wage. But that's a different argument.