A study cited by Fox News Digital projects that a proposed $25 federal minimum wage—paired with the elimination of the federal tip credit—could cost the U.S. more than 5 million jobs, with Sun Belt states facing some of the steepest losses.
What’s being proposed
Fox News Digital reported that progressive members of Congress are pushing to raise the federal minimum wage floor to $25 per hour by 2031 for large employers, with smaller businesses reaching that rate by 2038. The proposal would also eliminate the federal tip credit, raising the direct cash wage requirement for tipped employees to $25 per hour, according to the outlet’s reporting.
What the analysis projects
The Employment Policies Institute (EPI) projects the federal $25 mandate would result in more than 5 million job losses nationwide, Fox News Digital reported. Rebekah Paxton, EPI’s research director, told the outlet: “When you’re talking about doubling or tripling the minimum wage, you’re talking about doubling and tripling labor costs for businesses in those areas.”
Where the impact could fall
According to Fox News Digital’s summary of the EPI findings, states that currently follow the federal $7.25 minimum—such as Texas, Florida, Georgia, North Carolina, and Tennessee—could be hit hardest because required wage floors there would rise the most. The outlet also reported that EPI expects a large share of projected job losses to occur in restaurants and hospitality, industries with many tipped workers that would be affected by the end of the federal tip credit.
