Actually, GB, it's a little different than that....
You are right about profit margins. Most restaurants make about 10% profit after paying expenses. My husband and I make $ 50.00 for every $ 500.00 we run. Our average sales are less than $ 500.00 a day. Not pretty for all the hard work. Of course the big chains run a lot more money....so they have a lot more money
However, paying minimum wage wouldn't put us out of business....because just as every other expense there is...your menu prices reflect the cost of your restaurant.
What would put us out of business would be customers that won't pay the increased meal prices to cover that increase in payroll. In our case since we do such a low volume...every meal served would be increased 4-5 dollars. If I were a customer...I'd rather tip....and generously!
You can close your eyes to the things you do not want to see, but you can't close your heart to the things you do not want to feel.