Isn't this oversimplifying things? If McDonalds was previously making a 5% profit on its minimum wage workers, and the minimum wage increases by more than 5%, obviously they have to raise their price so they at least make a profit rather than a loss on each unit (of whatever they're selling). But, raising the price reduces demand so they'll probably have to reduce their production rate (number of units) by firing a few workers as well. Which I guess is in a way equivalent to marginal businesses failing.