So the main argument I see against a living wage is “If you get paid more, they'll just charge more.”
The response is often “They're already charging more.”
I don't disagree, but the bigger issue is that we're focusing on the value of money, rather than the value of the goods and services we'll get for the money. Companies will always find a way to make more money, and will use any excuse to do it. If the minimum hourly wage is “monthly cost of living in the area / 128” this wouldn't matter. If we link pay to cost of living “If you get paid more, they'll just charge more.” would hopefully turn into “If you get paid more, they'll just charge more. Which will require them to pay more until they figure out that pushing their 'losses' onto customers is a bad idea.”