Then, after every business having to lay out more for expenses they will raise their prices for their goods and services so the workers will have to pay more thus reducing their standard of living.

So just to get this right;

raising wages = increases the costs of goods = lower standard of living

then it logically follows that
lowering wages = decreases the costs of goods = raised standard of living

Both of which are demonstrably untrue ...

And the ultimate theoretical conclusion should be that paying workers nothing will equal free goods for all, which is of course ridiculous.

The trick is to pay employees enough to have *disposable* income, upon which our entire economy is based. Simply paying employees barely enough to get along encourages a system that feeds off of a large working class to the benefit of a relatively small owner class.

Which is exactly the direction we're seeing now ...