The author never assumed that businesses that pay high wages can’t be profitable. His position is simply that paying exceptionally low wages can help a business become more profitable than it otherwise would be.

This is too extreme. The author does assume that paying low wages leads to lower expenses and higher profits, but that doesn’t mean the business that pays the “lowest” wages has the “lowest” expenses or the “highest” profits.

The author overlooks the fact that paying family members exceptionally low wages might reduce family prosperity, which might cancel out whatever extra profits can be gained in a family business. The overall $ brought in might not be higher if you pay family low wages.

The author doesn’t make any assumptions about employees’ intentions. Maybe they are willing to work for low wages because otherwise they’ll be punished by their parents? The author doesn’t have to think they want to make money for the family.

The author doesn’t take a position on whether only businesses with low general operating expenses can succeed. Maybe other kinds of businesses can succeed, too, but just not as easily or as much.