[prepend]

Actually it increases income inequality. Raising wages affects the lowest wage workers most, the same who are impacted by raising prices. The wealthy and ultra rich don’t benefit from increased wages, aren’t harmed by raised prices, but they earn an income on increased prices so result in higher income.

Think of it as the owner has a percentage of revenue. So prices go up, they make more even if most of it is given as wages. Obviously, firms want to raise prices but are limited by the market because of competition. If everyone must raise prices then the competition element is removed.