Why Increase Wages?

One of the biggest problems with capitalism is that the owner has no incentive to increase wages in the absence of market forces demanding that increase. Since he does not need to worry about competitors stealing workers with better wages, increases would only come from the goodness of the owner's heart. Further, if he will be rewarded for keeping the money for investors which would otherwise go to workers his investors will discourage paying higher wages because it means more for them.

In an ideal world market forces would drive workers discontent with low wages to start businesses themselves. Perhaps it is a lack of credit available for workers. Or maybe it is just that more people are content to be workers rather than owners. In either case, there is an imperfection in the market which means that not enough workers will be resigning to start businesses of their own.