what do you think will then happen to prices?
Yes, any raise that people get is short term only as the prices for everything else will inflate to take the increased costs into account.
Not entirely true. A prohibitively high labour cost can force a business to be innovative if the market can’t bear a higher price for it’s goods or services. A perfect example of this is grain farmers in western Canada over the last 100 years. Farmers are price takers meaning that world markets dictate the price they receive for their commodities and they can’t ask for a raise.
It used to take one farmer to work 160 acres. Today one farmer can look after 2000 acres plus. The wholesale price of grain has never been cheaper inflation adjusted than it is today. Because of a shortage of labour in agriculture industry has developed self steering tractors, harvesters that automatically adjust to changing conditions and conveyors that have automatic movers. There are autonomous seeders that are coming out in the next 10 years that can work 24 hours a day with minimum human intervention.
Minimum wage increases might force the service industry to innovate also. I’m not willing to pay $20.00 for a Big Mac . Machines should be able to flip burgers better than any human can at a cheaper cost .