The federal minimum wage has remained at $7.25 an hour since 2009, although many states now require employers to pay higher rates. According to the National Conference of State Legislatures, 34 states, territories, or districts currently have minimum wages above the federal level.
Murphy’s proposal would create a new federal wage floor over several years, with different implementation schedules for large and small employers. The measure also seeks to end lower wage standards that apply to certain categories of workers under current law.
Bill Would Phase in a $25 Federal Minimum Wage
The Living Wage for All Act would increase the federal minimum wage from its current $7.25 level, beginning with an increase to $12 an hour during the first year after enactment. Large corporations would have six years to reach the proposed $25 minimum wage, while smaller employers would receive a 13-year transition period.
The legislation would also eliminate subminimum wages for tipped employees, including restaurant servers, as well as youth workers and workers with disabilities. According to The Washington Post, nearly half of the American workforce earns less than $25 an hour.
Murphy said the proposal is intended to address household affordability through higher wages rather than relying primarily on tax benefits. “Democrats need to offer solutions that are as big as the problems people are facing,” Murphy said in an interview with The Washington Post. “The way you solve people’s basic economic problem — not having enough money to pay the bills — is by making a minimum wage be a living wage.”
The bill has a companion measure in the House led by Rep. Delia C. Ramirez of Illinois. Murphy’s Senate legislation is backed by Democratic Sens. Richard Blumenthal, Andy Kim, and Ron Wyden. A separate proposal introduced by Sen. Bernie Sanders would raise the federal minimum wage to $17 an hour and has 33 Democratic Senate co-sponsors, including Murphy.
Supporters and Critics Outline Competing Economic Arguments
According to The Washington Post, the proposed $25 wage was based on living wage calculations developed by the Massachusetts Institute of Technology, which account for expenses including food, housing, child care, health care, and transportation.
Supporters argue that wage growth has not kept pace with inflation in recent months and say a higher federal minimum wage would better reflect current living costs. Saru Jayaraman, president of One Fair Wage, said support for a $25 minimum wage contributed to primary election victories in Illinois, New Jersey, Pennsylvania, and California, adding that she has heard support from both liberal and MAGA voters.
Business groups continue to oppose a substantial federal increase. Ryan Bourne, an economist at the Cato Institute, said a higher nationwide minimum wage could lead some businesses, particularly in lower-cost rural areas, to reduce jobs or close. He argued that state and local governments are better positioned to determine appropriate wage levels based on local economic conditions.
According to the National Conference of State Legislatures, 34 states, territories, or districts already have minimum wages above the federal rate of $7.25, while Congress has not increased the federal minimum wage since 2009. Murphy rejected concerns about widespread job losses, pointing to cities that adopted $15 minimum wages and saying the predicted employment impacts “did not materialize.”
