At that moment, before the shop closed but in the past, the workers were not ready to accept the wage cut, they didn't, so, the shop was closed. The whole sentence is about the past. No wage cut to accept now, the shop is closed.
the workers were prepared to accept the wage cut- this means the workers did agree to the wage cut
were the workers prepared to accept the wage cut-this is hypothetical referring to the past (i.e. the workers had a chance in the past to agree to the cut)
"the workers were prepared" is not the same as "were the workers prepared". You can
Lakshwadeep, I got it. You are right I really was thinking about this conditional as the second one. I'll have to digest it, but I got where I was wrong! Thank you!