It's not about the upstairs/downstairs divide, in most SME's this isn't all that big, its only when big corporations are involved that the divide increases drastically.
The suggestion I make is not that the divide should continue, and that lower paid workers don't deserve higher wages, they do, but that by increasing the cost to the business you inevitably cut into the profit that is being made to the point that businesses either have to put up prices or cut back on staff.
It's the argument i have against many of the Union actions that have happened in recent years. You can't have it all ways, there is a need to cut costs and pay more, but without increasing prices. Someone somewhere ends up having to take a cut in what they take home. Yes too often thats the lower paid worker, and yes perhaps starting at the top and working down would be a better approach to pay cuts, but that misses the fundamental point you were making, and that was increasing minimum wage is beneficial, and it also doesn't really work for SME's where there isn't really a management structure.
If you get back to the point of increasing minimum wage, then my argument still holds, you put up the base cost it takes to produce something and you either have to cut your costs elsewhere or put up your prices. If you cut your costs it will inevitably lead to redundancy, if you put up your price then, assuming people will still buy what you're selling at the higher price, you simply pushing up the cost to the end user.
I am totally in favour of paying people more, but simply putting up minimum wage won't help, it will create more unemployment and increases costs for us all.
Yes, Melvin I am an economist, took the exams online and got my third class degree from the University of Botswana, all I had to do was send £2k and I could print it off myself, more people should try it!