If reality works one way, but aspirational idealists are trying to "ensure" that it works in some other way, then their attempts will falter. Many regulatory interventions are at best performative rituals that measure their success in terms of creating the appearance that something is being done, with the question of whether what is being done actually resolves the actual problem (if there is one) barely being considered. In the worst case, these performative interventions create harmful unintended consequences at the same time, leading to them being a net negative.
It's worth noting, also, that nothing other than "actual humans" are involved in any aspect of this. There are no non-human "entities" in existence that have autonomous agency and participate in economic exchange. Every question here is about interactions among humans, and the organizational models that humans use to coordinate their activities are not separate "entities" with independent intentions.
Since we see that a majority of customers consistently go with the cheaper option, we know how they feel. So the "better" firm gets outcompeted.
So regulation, you say. But those regulations are set by governments voted in by the same consumers. Their preference for lower prices is clear, and government follows their preference.
Is your suggestion that the government go against the will of the people and apply those pro-worker-coop regulations anyway?
This litmus test is absurd. If more consumers buy products manufactured with child labour, is it "going against the will of the people" to ban child labour? Not in any meaningful way, certainly.
Instead, in the US the DOT or the CPSC (can't be arsed to look up which) says: "every helmet sold must meet this standard of safety", and then backs that up with guns. Now you're free to price-compare, with the assurance that your head won't explode. (Yah: I keep doing it! Sorry. I like injecting levity into serious subjects. Try not to get distracted.)
Consumers, acting as individuals, have negligible influence over corporate behavior, and are easily misled.
People, acting collectively (in this case as a "government", but as other collective organizations, too - including "corporations"), can stand up to other collectives and force them to adjust their behavior in pro-social ways.