The question that should be asked is, why doesn't the owner transform the business into a worker cooperative?

Easy! Because then the owner would have less money 😃

Sadly, this whole conversation has been derailed by the deflection of the focus to small businesses probably with <10 people. Lots of these arguments made by the person you responded to become more and more threadbare as a company grows.

Workers take a risk too when they work for a small company, and are often worse off than the owner when the business fails.

How do you figure? Starting a business (generally) requires a lot of money to lease space, make it usable for your needs, and all those employees you're paying. Some of that can be liquidated (often at a lower amount than you got it for) other expenses you're on the hook for. That can add up to be a lot.

Employees can be out pay, and while there's no doubt that totally sucks, the potential losses are basically limited to how long you kept showing up to work despite no paycheck.

Owners of small businesses usually put in a lot of unpaid time and effort. They often put in their own savings. So they have a lot more to lose than 2 weeks pay. They are also still liable for the legal, financial, and tax handling of the defunct company. There are often lawsuits around companies that fail. Directors can be named personally on the suit and while that can usually be fixed, it takes corporate lawyers to handle and they cost.

Actually when I owned a company and an employee I didn't know well gave me a significant Christmas gift I was very uncomfortable. I tactfully refused it and explained that it was policy (although I had just created the policy). I also hated when people treated me carefully - I made sure to have some friends on staff who would call me a dickhead if I was a dickhead. But I was forever squeezed between our cheap customers, wanting to pay employees more, wanting to reinvest in R&D, and keeping enough cash available for emergencies.
I know a 9-5 labor job isn't great, I've done that. But running/owning a small business is way more work and stress.

Actually I find discussing things to be relaxing.
I don't love capitalism; when unregulated it is very bad. If properly regulated, it can work, and it seems to work better than other systems. Capitalism in the U.S. has gone way off the rails (due to corporate and billionaire financing of politics).
But in our current system, the small business owners are just doing their best to work within the system. Many small businesses owners work much harder than their employees.

They're making a great point and you come here with this stuff.

Yes, there's a risk that they get fired and have to find another job. It's likely a smaller risk than if they work for themselves that they won't be able to sell their services or products.
There's even more of a risk if a company goes bankrupt, they may not pay the amount owing on the last payday, or any accumulated vacation pay amounts. And that sucks, but it's likely much smaller than the small business owners losses in that case.
I'm talking small businesses. There's not bonuses for firing people in small businesses. Bigger companies yes, and those are often evil mf'ers. But small companies are usually just owned and run by normal people.

Hey I stopped running a company by choice and went to a 9-5 job. It makes less money but it's so so much easier and less stressful.

this is why you gave lots of kids and steer some towards being lawyers/accountants, smh