You should have included the no raise in 3 year part in the first post, you made it sound like his policy of not raising prices has no effect on the employees. Do you guys run a lot of repeat jobs and if so have you got the set-up
and cycle down as low as possible? I have repeat jobs I haven't raised prices on in quite a long time, but increased efficiency has made them more profitable per hour than they were 10 years ago, even though material, tooling, and general shop supplies are way up.
I had an owner who would knock my quotes down, then complain the cycle times were too long and the parts were running the cycle time I used on the spread sheet. We used to go at it constantly over that, I was always waiting to get fired, but never did. The thing is the owner was a great salesman with zero machining knowledge.