Capitalists provide a service to workers: access to capital with no risk, and immediate payment for services. Meanwhile, starting your own business brings both risk and a long wait before the profits start rolling in.
In the conditions of a labor shortage, which necessarily materializes if wage rates go below the point corresponding to full employment, the payment of higher wages provides exactly the same benefit to employers.
Alexandria Ocasio-Cortez is aghast that some people like to pick up a few bucks doing work which brings no prestige. This is part of a larger obsession among politicians with de-valuing and working against unglamorous jobs that involve "dirty" work.
Even if a machine were technically capable of providing the same service more cheaply, many consumers are likely to prefer human staff in many cases, including nurses and care providers, entertainers, chefs, and teachers.
In a relatively unhampered market, a declining population is not necessarily an economic problem. But in a system where retirees can loot younger workers through government pension systems, there is a real problem, indeed.
Small businesses are essential in providing employment for workers who might otherwise be locked out of the mainstream economy. Small firms also drive large firms to compete for workers, thus driving up wages.