1 day ago, cbae wrote
An X% increase in wages for minimum earners doesn't mean that somebody in mid-level to upper-level should also get an X% increase. Furthermore, even this was the case, there are generally fewer higher-level workers than low-level workers in most organizations. So, it's not going to cost that much more to keep the non-minimum earners from whining because the minimum wage workers got a raise.
Even assuming you don't have to raise pay at all pay grades (which I think is a somewhat naive assumption) by rising pay for a substantial portion of your work force you put costs up, forcing you to put prices up. If everyone does this then any increase in wage your workers make is eaten up by increased prices. (This is partly why you end up increasing pay at all pay grades - the standard of living will drop for anyone whose pay doesn't increase.)
Setting a minimum wage is a delicate balance between feeding inflation and increasing unemployment on the one hand and ensuring wages match living costs on the other.
As for "inflation", an X% increase in wages won't ever equate to X% increases in product or service costs because no business ever has only labor costs. I'll take a 5% increase on everything I purchase if I can get a 10% increase in wages. I'll take that any day of the week.
Everything that isn't ultimately labour costs becomes profit margin (raw materials, for instance, have the combined costs of extraction and the profit of the company that owns the extraction rights; extraction consists labour and consumables - e.g. petrol for the digger which consists extraction and profit and so on, recursively).
For your argument to follow companies would have to be willing to see their prophet margins drop in "real terms" (i.e. the value $x would remain the same while the "value" of $1 drops). In reality they'll just boost their profit to compensate.
Your argument is, in fact, self evidently fallacious because, taken to its logical conclusion, we could generate wealth just by printing more money. The government could solve all its budgetary problems by initiating hyper-inflation - this does not work.