If everybody got a pay increase of (say) 5% Prices just go up by...

If everybody got a pay increase of (say) 5%
Prices just go up by 5%
No one benefits.
Inflation takes care of that.
economics 101

The current situation of low wage growth / low inflation is stable and beneficial.

Of course there is still the option of getting a pay increase by bettering yourself--- but Labor frown on this, they strive to serve and encourage mediocrity and the lowest common denominator.