Our country is wealthy enoughThat's really going to depend on the business. Plenty of businesses-- specifically ones with a lot of customer-facing staff-- would not be able to sustain labor cost increases up to 20%.
To take an easy example where I already know the #'s in the US, labor costs at a fast-food restaurant are around 25% of costs. Net profit margins range from 5% up to around 20%, but that top end is for McDonalds, the rest are on that lower end.
Increasing labor costs by 20% means a 5% increase in absolute operating costs. Sure, McDonalds may still run at 15%, but other places that increase for many others would erase profitability.
Even with a McDonalds, those franchises don't go for less than $1million each, often a lot more, and 20% profit on them seems to be about $150,000/year. So an owner is already looking at 7+ years to recoup their investment, and that's before accounting for any additional capex costs McDonalds may require when they roll out mandatory renovations.
Certainly there are many more businesses than fast food, so the above equation won't hold for every thing. But any low margin business with moderate customer-facing labor costs won't be able to manage this without raising prices, and then we're just shifting the money around to different piles. In fact as a result of those increased prices, the lower paid workers, while they may be able to work less hours and may work for a business that didn't cut their pay, they're still paying the price for that decision in their overall increase in cost of living.