Let's take another example just for fun.

Company is an industrial laundromat for 30 years. They have 50 workers each making between 11.25 and 15 depending on seniority (average $12.50) plus 2 managers who make $18 per hour. Labour makes up 50% of their business overhead.

The workers making 11.25 now make 14 (2.75). But you can't give the workers with seniority who make 13.5 a raise to 14 only can you? So you raise them 2.75 as well. And the managers need to make more than the managed so they get 2.75 as well.

Overall the cost of overhead of this company was increased (overnight) 22% in workers and 15% in managers. Their hourly wage expense of $661 is now $784.25.

Half of the company overhead went up 18.6% and therefore the net effect on the business is 9.33% increase in expenses... overnight.