$25 Minimum Wage Warning: Millions of Jobs Could Vanish

A new analysis from the Employment Policies Institute projects that a federal mandate raising the minimum wage to $25 per hour would eliminate more than 5 million jobs nationwide, with the heaviest losses concentrated in booming Sun Belt states.

The proposal, advanced by progressive lawmakers including Rep. Alexandria Ocasio-Cortez and groups such as One Fair Wage, would phase the wage to $25 by 2031 for large employers and 2038 for smaller ones while eliminating the federal tip credit. It forms the core of the Living Wage For All Act.

Rebekah Paxton, research director at the Employment Policies Institute, noted that states currently tied to the federal $7.25 rate would see the most dramatic impact. “Some of the top states that are going to be impacted by a $25 minimum wage include Texas, Pennsylvania, Florida, Ohio, Tennessee … These states have a massive workforce. They also currently abide by the federal $7.25 minimum-wage rate, so a $25 minimum wage represents more than tripling the current minimum wage applicable in those states.”

She warned that doubling or tripling labor costs would force businesses to cut jobs and hours. “Our report shows that that’s going to cost almost five million jobs across the country.” More than one-third of the projected losses—over 1.6 million—would hit the restaurant and hospitality industry, including 1.2 million tipped workers.

Texas, Georgia, North Carolina, Florida, and other Sun Belt states that have enjoyed strong post-COVID population growth and economic expansion would face the steepest absolute job losses. Proponents argue the increase is necessary amid rising costs of living and claim it enjoys support even among some MAGA voters. Critics counter that the policy would function as a job killer precisely in the regions that have been driving national economic growth, potentially reversing hard-won gains in employment and migration.