I know that sounds harsh but that's the reality that workers live with every day. Can't pay the prevailing rent? You have to sleep in the streets. Can't pay for medical insurance? You get to die from a treatable disease. Why should there be more consideration for businesses than there is for human beings?
As some businesses go out of business due to wages, that will put downward pressure on wages and keep things affordable for the remaining businesses.
Not necessarily. 1) there can be regulatory floors on wages. Half the folks in this thread are calling for higher minimum wage. 2) if cost of living outpaces wages, there may not viable business model at all for low wage employers. 3) it may be the case that in some markets working at all lowers the effective income due to welfare cliffs.
They may be able to pay an increased wage when the rest of the economy catches. So it may be optimal for the economy as a whole to support businesses temporarily.