How you work that into your business plan is harder, but you need employees for the business plan to work as all, so it still boils down to "pay them more".
Sure this small bar could literally pay more but if that means their business model doesn’t work then that probably means many small bars/restaurants business model won’t work in the area (unless they have old/low rent). So does that mean you’re ok with all small places being replaced with TGI Fridays?
But the 10% that succeed, are succeeding in the same environment as everyone else. They do so by offering food and an atmosphere that people want, and that you don't find in another restaurant in the area, even though the price is higher (significantly higher than TGI Fridays). Sure, there's also a good bit of luck involved, but that's hardly unique to starting and maintaining a business.
And what else would you suggest? Forcing people to work for $14? Prevent them from being sniped by other businesses for more money? They're already getting loans from the government to hire more people...
It’s even more true with little apps on the App Store. Most tiny little apps actually hurt the Apple experience because they are unworthy and don’t have the reputation but still want your data.
Small shops don’t economically make sense except for very local concerns.