Earlier quoted context omitted.
Our country is wealthy enough That'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 M…
Keep in mind that if the additional costs are applied to everyone, prices can increase without one restaurant in particular being penalised Demand is probably slightly elastic, but not that much (there are plenty of restaurants in France, despite very high cost of employment)
As for demand, it is always elastic. A lot of people eat fast food, and a lot of those people are going to be in a position where they're just barely fitting it into they're budget. Raise prices, and they're gone. That's not even getting to the actual elastic part where people actually have the money to decide either way if they're willing to pay at one price but not another-- that bottom group is simply gone.
Also you shouldn't focus just on the one example I chose. I happened to choose a discretionary spending activity because I knew fast food #'s off the top of my head, but the same thing applies to every single business with low margins and moderate labor costs. Even if you were right and every single one of them could raise prices without losing customers, that would also mean that the exact people we're trying to pay a living wage then have significant increases in their cost of living as everything around them raises prices.
[1] France may also not be the best example to compare to the US. Despite staggeringly astronomical wealth inequality in the US, it still has a lower poverty rate than France. Canada would probably be a better example. https://en.wikipedia.org/wiki/List_of_countries_by_percentag...