I think a boss should evaluate the contributions every worker makes, and periodically adjust the wage accordingly. Similarly, openings for advancement should be posted first for current employees, and then opened for general hiring from outside. I am not a fan of Cost of Living (COL) adjustments, but many companies do this routinely. I prefer to wrap the annual pay evaluations in with a set COL and then add merit pay to it.
The boss can only pass along what the market,(profits) will allow. My employees went 5 years without an increase in wages. Now that the economic engine has started, I gave across the board raises to all. We are back to making profits. For several years it was about survival. Maybe not fair, but reality.
No. Raises should be based on the free market, work well done, the affordability, and for what ever reason the boss or company decides. If they choose to pay less than their competitors, they will have fewer employees. If they pay more, they will be able to choose the cream of the crop. Capitalism works great when government gets out of the way and picks winners and losers. That's what you call "Crony Capitalism" which is what we have going on now in the US and why things are so messed up.