S-4981-119
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Sponsored by Christopher Murphy (D-CT)
What it does
This bill would amend the Fair Labor Standards Act to raise the federal minimum wage in annual steps to $25 per hour — reaching that level in 5 years for large employers (those with $1 billion or more in revenue or 500+ employees) and in 12 years for smaller employers. After reaching $25/hr, the minimum wage would be automatically adjusted each year to equal two-thirds of the national median hourly wage, whichever is greater. The bill would also phase out the lower "tipped minimum wage," the youth subminimum wage for workers under 20, and the subminimum wage certificates that allow employers to pay workers with disabilities below the standard minimum wage.
Who benefits
Approximately 17–33 million low-wage workers who currently earn below $25/hour, particularly those in food service, retail, home care, agriculture, and janitorial services. Tipped workers (roughly 4 million) who would eventually receive the full minimum wage regardless of tips. Workers with disabilities currently paid below minimum wage under Section 14(c) certificates. Workers under age 20 currently paid the $4.25 youth subminimum wage. Communities with high concentrations of low-wage workers, including rural areas and communities of color. Federal and state governments that may see reduced spending on means-tested assistance programs such as Medicaid and SNAP if worker incomes rise.
Who is hurt
Small businesses in low-wage, high-labor-cost industries — such as restaurants, retail, childcare, and agriculture — that may face difficulty absorbing rapid wage increases. Employers of workers with disabilities who operate under Section 14(c) certificates and may reduce employment if required to pay full minimum wages. Consumers who may face higher prices for goods and services in labor-intensive sectors. Workers in regions with lower costs of living (e.g., rural Midwest and South) where $25/hr may represent a more disruptive wage floor than in high-cost urban areas. Young workers under 20 who may face reduced hiring if the youth subminimum wage is eliminated. Nonprofit sheltered workshops that employ workers with disabilities and rely on the Section 14(c) framework.
Supporters argue
Supporters argue that the federal minimum wage has lost roughly 40% of its purchasing power since its 1968 peak and that the current $7.25/hr floor — unchanged since 2009 — is the longest period without an increase in the law's history. They contend that indexing the wage to two-thirds of the median hourly wage creates a durable, self-correcting standard that prevents future erosion, and that the tiered phase-in — giving small employers up to 12 years to adjust — directly addresses concerns about business disruption. They also point to CBO analysis of prior minimum wage proposals showing that wage gains for tens of millions of workers would substantially reduce poverty and reliance on federal assistance programs.
Opponents argue
Opponents argue that a uniform national floor of $25/hr ignores vast regional cost-of-living differences — a wage that is modest in San Francisco or New York City could represent a severe shock to employers in rural Mississippi or Appalachia, where median wages are far lower. They contend that CBO analyses of comparable proposals have projected significant job losses, particularly among low-wage and entry-level workers, and that eliminating the Section 14(c) subminimum wage could cause sheltered workshops to close, reducing employment options for workers with severe disabilities. They further argue that permanently tying the minimum wage to median wage data removes Congress's deliberative role in setting labor standards and may produce automatic increases that outpace regional economic conditions.