I hear this objection to raising the minimum wage to a living wage all the time. “But what if they can't afford a living wage and go bankrupt?” Then they SHOULD go bankrupt.
This is like someone starting a truck company with a specific business model and asking “What if they can't afford trucks?” Or having a business with a business model where you sell books for less money than you bought them for and demand to be allowed to just steal books instead because “How could I make money otherwise?” Or having a plantation and saying “This can't be profitable without slaves! We need to bring slavery back!” If your business requires the exploitation of others then maybe it's better if it didn't exist. Maybe your business model just simply isn't viable.
These people seem to assume that we have to start with the idea of a business' well-being first, and only consider the well-being of its workers second. I refuse. The well-being of the workers should be considered first and THEN the well-being of the business.
A business that cannot pay a living wage is a business that should not exist and that doesn't have a viable business model.
All that being said, btw, there has been research about this and reasonable rises in minimum wage actually do not seem to correlate with increased business bankrupties anyway. So even their entire assertion seems to be wrong. But even if they were right about the facts (which they're not) it still wouldn't matter because, say it with me now: A business that cannot pay a living wage is a business that should not exist because it doesn't have a viable business model.