I find the argument irksome, as it ignores a lot of the peculiarities and variances between markets, but at least it's an interesting perspective.
If I am complaining that I cannot afford a private chef in my home, then the answer is for me to figure out how to earn more. Or go without a chef.
It is the same thing for a restaurant. Either figure out how to make more money (even if it means closing the business and changing your line of work, or figure out how make do without the chef).
No reason to not let them suffer from their erroneous assumptions though. But politically, I expect them to be bailed out.
Why not? If we were talking about a tech company, would you feel the same way?
The feedback mechanism for identifying errors is failure as is the incentive to correct them. Otherwise, we end up in a privatize the profits, socialize the risks situation. As we currently are.
For example, I bid for land for commercial real estate. I have been outbid by another developer who assumes they can pay more for the land because their labor costs will be lower for the business. They want to bet they can get away with paying bottom tier wages, whereas I want to pay higher wages. Or have more redundancies or use higher quality materials. Of course, the land gets sold to them at the higher price, they get to build the business.
Why should they get bailed out? They wanted to take on more risk, in the form of not allow much wiggle room for labor costs or using subpar materials. That is their fault, and society benefits from the market sending a signal from that developers failure to better allocate resources.
>If we were talking about a tech company, would you feel the same way?
Yes.
High wage countries don't seem to have a shortage of places to eat. if competitors are subject to the same labor market, all prices should go up together which would not give you a competitive disadvantage. certainly a lesser disadvantage than not being able to open because you are unwilling to pay the market labour rate.
That's a textbook example of price elasticity from economics 101. You can also think about it this way: if that weren't the case, they would have already raised their prices even before there was a labor shortage.
> all prices should go up together which would not give you a competitive disadvantage
Not a competitive disadvantage, but still a disadvantage. Take restaurants for example. If every restaurant in the world raised all of their prices by the exact same amount at the exact same time, they wouldn't lose any business to each other, but they'd still lose a bunch of business to people eating at home.