The tradeoff with this way of thinking is higher unemployment and taller barriers to entry for new businesses.

You're not wrong but higher unemployment helps push prices down. The economy is a huge collection of competing forces so answers are rarely so straight forward.

Or someone more adaptive and innovative fills your economic niche in a way that you couldn't by dealing with the market realities and investing in their employees. Capitalism is amazingly resilient to rising wages.

I think that works well in Tech, but I don't see how the OP's Beer Garden could possibly innovate and adapt their way into having the money to pay superior wages.

Well that's capitalism. Adapt and grow, or die. OP's business going under is not going to make the demand for beer gardens go away. Someone more efficient will fill it.

Labor has been forced to operate under the same rules for decades now. Don't like the minimum wage? Then starve. Or figure out a way to provide more value. A dozen other people will be desperate enough to take it. I've zero sympathy for business owners being held to the same forces.

This business needs some bootstraps!