S.1332 - Raise the Wage Act of 2025 (119th Congress)
Summary
The Raise the Wage Act of 2025 proposes incremental increases to the federal minimum wage, ultimately reaching $17.00 per hour within five years of the effective date, and indexing it to the median hourly wage thereafter. It also eliminates the separate minimum wage for tipped employees and newly hired employees under 20, phasing in the full minimum wage for these groups. The Act further addresses wages for individuals with disabilities, transitioning them to fair wages and eventually phasing out special certificates that allow for subminimum wage employment.
Expected Effects
If enacted, the Raise the Wage Act of 2025 would significantly increase the earnings of low-wage workers across the United States. This would lead to higher labor costs for businesses, potentially impacting prices, employment levels, and business investment decisions. The elimination of the tipped minimum wage could particularly affect the restaurant industry, requiring adjustments to business models and potentially altering tipping practices.
Potential Benefits
- Increased earnings for low-wage workers, potentially reducing poverty.
- Stimulation of economic activity through increased consumer spending.
- Improved living standards and financial stability for affected families.
- Greater equity in wages for tipped employees and younger workers.
- Phasing out subminimum wages for individuals with disabilities promotes inclusivity.
Potential Disadvantages
- Potential job losses, particularly in industries with tight margins.
- Increased prices for goods and services due to higher labor costs.
- Reduced business competitiveness, especially for small businesses.
- Possible reduction in tipping, affecting the income of some tipped workers.
- Uncertainty regarding the long-term economic effects of a significantly higher minimum wage.
Most Disadvantaged Areas:
Constitutional Alignment
The Raise the Wage Act of 2025 is rooted in Congress's power to regulate interstate commerce, as outlined in Article I, Section 8, Clause 3 of the Constitution. The Fair Labor Standards Act, which this bill amends, has historically been upheld under this clause. The Act's provisions regarding minimum wage and worker protections align with the broader constitutional goal of promoting the general welfare, as stated in the Preamble.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).