If the unskilled labor market is completely "free market" then you have a high risk of exploitation. You can bet that if there was no minimum wage that many low-skilled workers would be paid a lot less than $7.25/hour. While there would be more total jobs available at the low end and the teen/young-adult unemployment rate would probably be lower, there would be a lot more "working poor" who had to rely on public assistance in order to survive (or they would be living in 3rd-world conditions because that is all they could afford to do). This is not good for an economy or a nation.
On the other hand if labor is so highly regulated that investors thinking about starting new companies avoid creating jobs that are unskilled just to avoid the regulation, you will have a shortage of work for those who are not-yet-skilled (i.e. teenagers and adult who could be trained but haven't been yet) and those who will be perpetually unskilled due to intellectual and/or physical limits or due to choice (there are a few people who simply do not want to learn new job skills). This isn't good for an economy or country either.
Striking the "right balance" of regulation and the "right form" of that regulation (e.g. direct government regulation or laws that make it easy to unionize or a combination of the two) is not easy and it's typically a moving target: The ideal regulations in given country and industry will change as the industry changes and as the country's economy changes. About the best we can hope for is to be "close enough" to having the "right balance" that the economy functions reasonably well, the short- and long-term unemployment rate and discouraged-worker-rate overall and the rates for specific sectors (e.g. young adults without any college education) aren't so high as to be considered uncivilized, and the actual wages for almost all workers isn't so low as to not cover a very basic standard of living.