Democrats in the House of Representatives have introduced a new bill to increase the federal minimum wage. This bill, titled the Raise the Wage Act of 2025, seeks to increase the federal minimum wage from $7.25 to $17 per hour over several years.
The federal minimum wage has remained at $7.25 for more than 10 years, spurring arguments that an increase is long overdue. The bill would also eliminate the $2.13 per hour minimum wage for tipped workers while removing lower minimum wages for youth workers and those with disabilities.
While the federal minimum wage hasn’t increased in over $10 years, workers are still making more. That’s due to several states having their own minimum wage. According to the Bureau of Labor Statistics, no U.S. state has average hourly earnings below $28, even though 20 states rely on the federal minimum wage of $7.25.
How Likely Is It That the Raise the Wage Act of 2025 Will Pass?
The short answer is that it is incredibly unlikely. While the bill has major support from Democrat Representatives, the House is controlled by Republicans, albeit with a slim 218 to 215 majority. Even if the bill could pass the House, it would go to the Senate, which is controlled by Republicans with a 53 to 47 majority, and then to Republican President Donald Trump.
How Would Increased Wages Affect the Economy
Increases to the federal minimum wage would potentially bring with them increased inflation. That’s something the current administration will want to avoid. There are already concerns that inflation will increase under President Trump’s trade polices. The administration likely doesn’t want to deal with the additional inflation that could come alongside wage increases on top of that.
With all of the recent economic uncertainty, it’s important to stay up to date on the latest happenings. The TipRanks Economic Indicators Dashboard can help with that.
