Sen. Bernie Sanders and Rep. Robert C. Scott reintroduced the Raise the Wage Act, joined by 175 House and Senate co-sponsors. The bill seeks to gradually raise the federal minimum wage from $7.25 to $17 per hour by 2030 and end subminimum wages for tipped workers, employees with disabilities, and youth. Supporters say it will reduce income inequality and provide a livable wage. This bill has been introduced in almost every Congress since 2015.
The Employment Policies Institute (EPI) projects 1.2 million job losses if the bill passes. A 2023 Congressional Budget Office study on a similar Raise the Wage Act in 2023 estimated 1.4 million jobs lost. In the same study, EPI predicted 40% of job losses would hit the restaurant industry, accounting for 5.4% of total jobs in the industry and 8.8% of tipped jobs across industries. (This industry is a big employer of female workers.) It also estimated that combining federal tip credit elimination with a $17 minimum wage—a 700% increase in the tipped minimum—would cut an additional 447,000 jobs, totaling 1.65 million jobs lost.
EPI found 62% of job losses would affect women, and 63% would impact workers aged 16 to 24, hurting those striving for financial stability. Critics warn the bill could harm businesses and consumers. Restaurants, reliant on tipped workers, typically have only 3% to 5% profit margins. Raising the tipped minimum wage from $2.13 to $17 per hour could force price increases, potentially reducing tips. A 2016 Cornell University study found that customers tip less when servers earn higher wages. The Congressional Budget Office reported in 2021 that a $15 minimum wage would cause consumers to absorb 15% to 20% of businesses’ higher labor costs. The seven states that eliminated subminimum tipped wages also have higher living costs.
The Economic Policy Institute said, “In January 2025, 21 states and dozens of localities implemented minimum wage increases based on state, local, or municipal laws that already set the minimum wage higher than the federal standard. In total, 30 states and the District of Columbia have a minimum wage above the federal minimum, and many more localities have minimum wages above their state minimum wage.” However, in the same report, the Institute said the federal increase would have little effect in areas where local wages already exceed the proposed minimum.
Small businesses, employing nearly half of U.S. workers, would face challenges especially. In 2021, the National Federation of Independent Business found in a study that 60% of small business owners opposed a $15 minimum wage, suggesting a $17 wage would be even tougher. Higher wages could also spur automation. The University of California in 2018 showed that a 10% minimum wage increase led to a 1.4% rise in automated jobs, displacing low-wage workers.
The Raise the Wage Act risks unintended consequences. Projected job losses of 1.4 million, higher consumer costs, increased automation, and burdens on small businesses and the hospitality industry outweigh the benefits.
A large minimum wage hike could disrupt fragile economic ecosystems, requiring more targeted solutions to address income inequality without destabilizing jobs and raising prices. The Raise the Wage Act is a wolf in sheep’s clothing, providing false hope for employees with a potential for great loss.