I would never say that “there’s not enough money in the economy to pay a fair wage”, @fundevogel, but I would say that “the economy is structured and balanced around the wages that are paid now”, and large increases (or decreases, for that matter) across a whole class of employees will upset that.
“Upset” is maybe not always a bad place to be, but for business it’s a very untenable place. Until business owners can predict with a pretty fair degree of confidence what their costs are going to be (and their sales, of course), they can’t expand, can’t hire more workers, and in many cases can’t even afford to replenish inventories to current “normal” levels to maintain sales as they are. Business owners who can see a near doubling of their labor costs are certainly in that position! (This also goes a long way to explain the current stagnation in hiring in what is still believed to be “a recovery”, because business owners are seeing huge increases in labor costs due to the costs to be imposed by the Affordable Care Act – Obamacare – which is also causing many business owners and managers to game their payrolls to match the “full time employee” ceilings that dictate many of the various elements to become effective on the business. Hence, lots of cuts in hours, refusal to hire more workers or more full-time workers, withholding of benefits offers, etc. – the opposite effect of what the law intended to make happen, in other words. It’s bad enough when “simple people” don’t understand about “unintended consequences” of mandating costs in a huge economy, but the politicians who passed this thing – and who routinely pass “minimum wage legislation” – should know better by now.)
If the upset comes from large gains in productivity, then it’s a different story. All of a sudden wages as a percent of cost of goods sold decrease, which means that the business can probably afford higher wages, and more hiring, and general expansion. Profits will also rise, of course – which is the purpose of business in the first place, after all – and everybody really does win: owners / investors, suppliers, employees, customers and even those who live off the dole, because the business and the owners and employees will be paying more income tax.