If you raise the price of something in one town only, generally you will sell less of it because some people at the margin will go to the next town over and buy it for cheaper. If I've got a warehouse in Seattle and one in a suburb, ok I'm moving all entry level work to the suburb where I can hire for cheaper.... If the government counters by raising wages especially high, everywhere, then the business mind will look for other solutions when possible. Like in Japan where they have vending machines everywhere to cut down on expensive labor. And some companies will be further incentivized  to develop and market robots and other types of machines that can do repetitive work because the demand for anything labor saving just got greater. Plus some who make things here may just be pushed to start making outside the country and importing, because the cost savings just passed the line where it is now worth it for them.... This is all simple economics and understanding of human nature.