I don't see how that's true: if people don't make themselves desirable as employees, they won't have a job and won't live off of any wage at all.give people the false impression that they can expect to live off a wage if they do nothing to improve/make themselves desirable as employees.
Regarding unemployment, any safety regulations and the like can also be said to increase it. Deniying minimum work conditions puts employment on a slippery slope that ends on something akin to slavery (and since we're talking about just removing regulation, not relaxing it, what's going to stop if from sliding all the way down?). Re: illegal immigration, exactly the same argument can be made PLUS the fact that people do something illegal is not, by itself, an argument to legalize it.