Sen. Chris Murphy (D-Connecticut) introduced legislation on Thursday to raise the federal minimum wage from $7.25 to $25 per hour through phased increases.
The bill, titled the Living Wage for All Act, includes a companion measure in the House led by Rep. Delia C. Ramirez (D-Illinois). It aims to phase in the increase, starting with an initial jump to $12 per hour, reaching $25 over several years. Larger employers would face a shorter compliance timeline of about six years, while smaller businesses would receive up to 13 years.
The proposal would also eliminate subminimum wages for tipped workers, youth employees, and workers with disabilities.
The federal minimum wage has stood at $7.25 per hour since July 24, 2009, the last time Congress enacted an increase under the Fair Minimum Wage Act of 2007.
Only about 1% of workers currently earn exactly that rate, as many states have set higher floors, per the Bureau of Labor Statistics.
Bill Details and Sponsorship
Murphy introduced the bill on Thursday with co-sponsors including Democratic Sens. Richard Blumenthal (Connecticut), Andy Kim (New Jersey), and Ron Wyden (Oregon). A separate Senate proposal from Sen. Bernie Sanders (I-Vermont) seeks a $17 minimum wage and has 33 Democratic co-sponsors, including Murphy.
The $25 target draws on MIT Living Wage Calculator estimates, which factor in the costs of food, housing, transportation, health care, and other basics.
Next Steps in the Legislative Process
The bill was introduced in a Republican-controlled Congress following the 2024 elections, making its near-term passage unlikely. It has been referred to the Senate Committee on Health, Education, Labor, and Pensions. If advanced, it would require committee approval, floor debate, and passage in both chambers before reaching President Donald Trump’s desk. Similar past efforts, including previous versions of the Raise the Wage Act, have stalled.
Current Minimum Wage Framework
The federal minimum wage applies nationwide under the Fair Labor Standards Act, but it sets only a floor. States and localities may set higher rates, and employers must pay the higher of the federal or applicable state/local rate.
Texas follows the federal $7.25 rate, with no state minimum wage law that exceeds it.
In contrast, 34 states, territories, or districts have minimum wages above $7.25, according to
the National Conference of State Legislatures. Examples include Washington, D.C., California, and New York, with rates often exceeding $15. States like Georgia and Wyoming have lower nominal rates, but the federal $7.25 applies to covered workers.
Potential Impact on Small Businesses
Business groups have historically opposed large federal minimum wage increases, arguing they raise labor costs, particularly for small and independent firms in low-cost areas.
Economist Ryan Bourne of the Cato Institute wrote that such an aggressive hike “would be extremely risky” for the diverse U.S. economy and “could be very destructive,” noting that a high national floor would hit hardest in lower-productivity and low-cost regions while risking disemployment effects.
Studies on past state-level increases show mixed results. Some research indicates small businesses can offset costs through higher revenues and productivity gains, with limited overall employment losses but possible reductions in hiring of part-time or entry-level workers. Other analyses note risks of reduced business entry or shifts toward automation.
AI, Workforce Changes, and Wage Debates
Discussions around minimum wage have coincided with rapid AI adoption, which some analysts link to shifts in labor demand.
Research from the Dallas Fed and others indicates that AI has reshaped tasks more than it has caused widespread displacement so far, with varying wage effects across occupations.
Living Wage Context in Texas
According to the MIT Living Wage Calculator (updated February 2026), a single adult in Texas needs approximately $21.77 per hour to cover basic expenses without public assistance. This rises sharply with the number of children:
- 1 Adult (no children): $21.77 per hour
- 1 Adult + 1 Child: $35.77 per hour
- 1 Adult + 2 Children: $44.95
- 1 Adult + 3 Children: $56.14
