Reuters

Increasing the minimum wage might not lead your local McDonald's to fire its cashiers. But it might mean that a 5 Guys will one day replace it.

That's the upshot of a new working paper from the Federal Reserve Bank of Chicago that puts an intriguing twist on the age-old minimum wage debate. Most studies on the subject tend to focus on jobs (and, as regular readers of this site may know by now, those studies often come to wildly different conclusions). But this time around, researchers Daniel Aaronson, Eric French, and Isaac Sorkin also decided to look at what happened to the fast-food restaurants themselves in three states—Illinois, California, and New Jersey—after they raised wages.

While the hikes had a "small" impact on jobs, the economists found, they had a substantial impact on businesses. In states where employers were asked to pay their workers more, fast-food restaurants were more likely to close. At the same time, new restaurants became more likely to open, at least in Illinois and New Jersey. In California, the story was slightly different. More fast-food joints shuttered up, but there wasn't a significant jump in openings. As a result, employment fell, but as the paper notes, the reduction "was small and sometimes indistinguishable from zero."