Sen. Chris Murphy says his $25 federal minimum wage bill makes sure “everyone is able to pay their bills.” But new EPI research shows it would eliminate 5 million jobs in the next five years, leaving millions of Americans without the jobs they rely on to pay those bills in the first place.
A $25 minimum wage at the national level represents a 245% increase in the current minimum wage of $7.25 per hour by 2031. It would also eliminate the federal tip credit system for tipped restaurant workers.
This new EPI study builds on decades of economic studies and uses methods from the nonpartisan Congressional Budget Office to quantify what Sen. Murphy’s proposal would do to American jobs. Read the full study and methodology here.
Who Will Be Affected by 5M Lost Jobs?
EPI finds Sen. Murphy’s plan for a $25 minimum wage with no tip credit would cost 5.01 million jobs across the country.
Of those job losses:
- Fifty-two percent of losses (-2.65 million jobs) would be for workers under the age of 25, with -1.85 million jobs lost for teens alone;
- More than one-third (-1.74 million jobs) would be in the restaurant industry, which employs one of the largest shares of minimum wage workers;
- Over 500,000 jobs would be lost across supermarkets (-204,495 jobs), elementary and high schools (-159,189 jobs), and construction (-146,056 jobs);
- Nearly a quarter would be those held by tipped workers (-1.22 million jobs) due to the elimination of the tip credit;
- Roughly sixty percent (-3 million) would be those held by women.
Texas, Pennsylvania, Florida Among Hardest Hit
The proposed $25 wage would hit states with large workforces especially hard. Texas would lose 831,289 jobs, followed by Pennsylvania (-295,473 jobs), Georgia (-253,708 jobs), and North Carolina (-250,000 jobs). Even states that have increased their minimum wage rates above the federal level would face significant losses, including Florida (-234,730 jobs) and Ohio (-213,802 jobs).
High Wage Areas Have Already Suffered Job Losses
Recent minimum wage hikes at the state and local level are a cautionary tale for the rest of the country.
- “Fight for 15”-era wage hikes from 2011 to 2019 slashed roughly a quarter million jobs just for teens and entry-level workers, according to a Journal of Labor Economics study and EPI analysis.
- California’s $20 fast food minimum wage eliminated tens of thousands of jobs just in the fast food industry, according to UC-San Diego economists.
- New York City’s climb from $15 to $17 per hour has resulted in roughly ten thousand fewer jobs just in the last few years, according to Bureau of Labor Statistics data.
- Washington, D.C.’s tip credit elimination scheme led to a rapid decline in restaurants and employees – pushing the City Council to abandon future tipped wage hikes.
The majority of economists say minimum wage hikes have job loss consequences. EPI’s latest estimates put a number on just how disastrous wage hikes like Sen. Murphy’s could be for American workers.