>but the prices would also be commensurately higher.

No, the prices would be more transparent, not higher. You've made clear in other comments ITT that you believe tipping to be mandatory ("If you don't want to tip, don't dine at full-service restaurants in America"), which means you consider prices 15% or more higher then sticker price to already be the rule. Requiring that to be part of the advertised price instead of hidden is purely good for free market efficiency. Anything that isn't fully optional should be part of the advertised price. The employers and employees have superior information for correct decisions, and once a transaction (dining) has already been committed to a superior position of power as well.

Thisnis one of these counter arguments you often hear in favor of low wages in general.

And it is a horrendous argument.

You are literally actively arguing for greater inequality.

If a company can not cover their costs with their revenue, then they need to cease to exists.

And ofcause they need to pay fair market wages.

Does that make it not a subsidy? We say that the US govt subsidises oil companies even though petrol prices would be higher if they stopped.

The consumer already paying the "higher price" through tips. I much prefer transparent pricing with no hidden expectations or fees.

They already are, it's just expected you calculate yourself the real price.