I think most people simultaneously underestimate the cost of labor and overestimate the profit margins of companies, often by quite extreme margins. I think that's because many here view things like Apple as typical where they make something like $400k in profit per employee. Excessive profit margins aren't really a sign of a well run company so much as silly huge markups. Apple sells phones worth around $300 for $1000 in large part because of extremely effective marketing. This is not how a normal business works.

A company that offers competitive prices is often going to run on razor thin profit margins. For instance WalMart, opinions of the company/owners aside, certainly qualifies as well run. Yet their profit per employee is just $4,200. That just ends up being a whole lot of money due to scale. At the same time just $4,200 per employee means their entire profit margin is heavily dependent on labor costs. Give everybody a $2.50/hour raise and they've gone from an incredibly profitable company, to a company on the path to bankruptcy.

And in these two extremes WalMart is far closer to a typical business. While I do think we should do what we can to help ensure good jobs for qualified applicants, I also think we should not move towards a world where the survivors in business are obligated to move more and more towards Apple level markups just to cover their costs. And those increases in turn often doing a great job of then stripping away real gains in come.