A "living wage" existed before we gave power back to the capitalists, cut their tax rates, and allowed them to move operations overseas. Unions raise wages and sometimes prices, but the latter not so much. Look at a worker's pay and benefits in Denmark and see the prices for basic products are comparable to that in the U.S.
You need to understand that theory is not always a rule. Also, how can you say these things and not come to the realization that capitalists keep increasing prices to maintain their profits? People have more money, capitalists raise their prices. Profits are at a loss, so capitalists raise their prices.