A recent study by the conservative Employment Policies Institute (EPI) projects that a proposed federal minimum wage increase to $25 per hour would result in the loss of nearly five million jobs nationwide, with Sun Belt states such as Texas, Pennsylvania, Georgia, North Carolina, and Florida expected to suffer the largest absolute job losses [1]. The legislative proposal aims to raise the federal minimum wage to $25 per hour by 2031 for large employers, and by 2038 for smaller businesses, while also eliminating the federal tip credit and raising the direct cash wage requirement for tipped employees to $25 per hour [1].
Rebekah Paxton, EPI's research director, described the $25 federal mandate as a "job killer," emphasizing that states currently abiding by the federal $7.25 minimum wage would see labor costs more than triple under the new policy [1]. Paxton noted that while some businesses may attempt to absorb increased labor costs through higher prices, this strategy is not always viable, leading to job cuts and reduced working hours [1].
The report highlights that more than one-third of the projected job losses would occur in the restaurant and hospitality industry, including 1.2 million tipped workers [1]. The Southeast, particularly Florida, Georgia, and North Carolina, has experienced significant population growth post-COVID, making these regions especially vulnerable to the economic impact of the proposed wage hike [1].
The push for a $25 minimum wage comes amid renewed pressure from progressive activists and as the federal minimum wage has remained at $7.25 per hour since 2009 [1].
CONCLUSION
The EPI study suggests that a federal $25 minimum wage mandate could have severe negative consequences for employment, particularly in fast-growing Sun Belt states and the restaurant and hospitality sectors. The proposal is seen as a major risk to job stability and business viability, with nearly five million jobs at stake if enacted.