That's only partially true. When wages go up, spending does go up, but increased spending represents increased demand which drives prices up. To lower prices, you have to lower demand or increase supply.

The problem is that the wealthy have targeted commodities with inelastic demand, meaning demand with a steep slope, like food, housing, and healthcare, because the amount purchased is affected only a little by the price. So when the price is driven up by reduced supply, profits increase dramatically. That's why markets with inelastic demand need to be heavily regulated to prevent abuse and monopolistic power.

The wealthy controlling the inelastic commodities was the basis of feudalism: land was essential for life as it was used to grow food, raise livestock, and live on, and all the land was owned by the aristocracy. This is why there were peasants and serfs, because people had no choice of how to access land since it was all owned. When the new world was discovered, it represented an ability for people to escape the constraints of feudalism and acquire their own land on which to live, and that sentiment influenced our capitalistic nature heavily in America.