Eliminating minimum wage or overtime pay would definitely have a material effect on the economy. Nobody disputes that. If you want to get rid of labor laws, you should either argue that that effect is desirable, or argue that while the effect is undesirable, freedom to contract is more important.
I think freedom to contract is more important than some national standard regarding minimum wage, sick pay, hours worked per day/week/month, vacation time, etc.
Regardless, I was commenting specifically on the exempt/non-exempt distinctions in the law which are terribly vague and open to interpretation as well as easily influenced via politics (i.e. certain industries and occupations will get favored treatment in the legislation due to lobbying efforts and not due to some justifiable public policy goal).
Specifically speaking to this law, i don't think it matters as much because IT professionals don't have a weak bargaining position.
The people below the limit do not magically increase their productivity above the limit. It simply becomss illegal for them to work. They are the American untouchables, farmed by welfare agencies for grant money or simply discarded.
The reason behind labor standards is that without them companies will do everything in their power to take advantage of their workforce (see early 20th century America, specifically coal mining in Appalachia, which, to be honest, hasn't changed all that much - see modern day, specifically the Upper Branch mine disaster and Massey Energy).
Labor standards enforce a minimum acceptable standard and prevent the kind of race-to-the-bottom we see now (between states, between regions, between countries).
We all need to remember that many of our positions are the exception, not the rule (i.e. we often have the flexibility and freedom to negotiate) There are still hourly contracts in IT and these would be affected by a rule like this. MS gamed the system in WA state to avoid paying overtime while still being able to take advantage of hiring contractors instead of salaried employees (this was in the 90s - unsure if the same system is still in place). Meanwhile, chipping away at the higher salaried workers just makes it easier to chip away at the lower salaried workers (e.g. retail workers, restaurant workers).
We're all in this together.
For example, as somebody pointed out above, minimum wage laws don't make sure everybody makes a living wage, they just make sure that some people are essentially prohibited from working. I mean, if I wanted to work for, say, $3.75 / hour, compared to the alternative of $0.00/ hour, why should the government prohibit me from making that deal with an employer?
Teenagers are the classic example of this type of worker. See http://mjperry.blogspot.com/2010/03/update-on-wsj-editorial-... for some data.