Think about that. Let's take your world, the fry cook can live on his salary. Now the person with a University degree can command a much higher wage since his skill is in great demand.
He's got more money, so he can afford more expensive stuff, increasing demand, which increases prices, and now your fry cook can no longer live on his salary.
Do you want to respond by raising wages again? You're in a never ending loop.
It's pretty much automatic. If there's more demand than supply, then companies will offer more money to hire this person with a university degree.
The only way you keep this person's wage down is increase supply - have lots of people with university degrees. But that's not the real world, in the real world most people are not able to get a degree.
> The only way you keep this person's wage down is increase supply - have lots of people with university degrees.
Again, the second part of this statement does not necessarily follow from the first. There are countless ways of tweak supply/demand of McJobs, such as low minimum wages resulting in a glut of retail locations , changing total hours non-degreed workers (read high-schoolers) can work, adjusting rules on temp workers, community college intakes, etc.
There a many variables, and increasing minimum wage impacting a subset of (mostly unskilled[0]) workers doesn't automatically mean an increase in income for skilled jobs.
0. I dislike the term, but it conveys my intended meaning. "Jobs that require no prior training" is unwieldy.
The demand for the university degree didn't increase when the fry cook's salary rose. Increased demand raises salaries, not a worker commanding a higher wage.
He's got more money, so he can afford more expensive stuff, increasing demand, which increases prices, and now your fry cook can no longer live on his salary.
Do you want to respond by raising wages again? You're in a never ending loop.