Forgive me if this has already been mentioned.
A large issue today is the reliance and use of the stock market as the end all be all.
A lot of firms use ratios to determine investment strategy, which in turn can impact stock $.
Corporations have become laser focused on "creating shareholder value", and thus are also laser focused on ratios.
This is why it is incorrect to assume that direct labor has a 1:1 relationship with overall price of a good. It's actually worse than that.
Say a company sold a product for $2 and for ease let's pretend that the only cost is labor at $1. They have a ratio of 100% which looks pretty strong to investors. Now the labor force wants .50 more. The company could just pass that along, and sell the product for $2.50. After all, they would still make their $1 on every sale. But, what about "creating shareholder value"? What would they do if they couldn't keep their stock price soaring upwards based on their terrific ratios?! So they decide that they must keep that ratio of 100%, and they price their good now at $3 ($3 to $1.50 in cost). The era of ratios and the intense focus on only shareholders has gotten us into an insane spiral. We blame the people wanting $.50, but fail to see the real issue where the company decided it "had" to make an extra $.50 in profit to cover that cost. As usual, 80% of the country gets played.