A proposed federal mandate to nearly triple the minimum wage to $25 an hour would destroy more than five million jobs nationwide, according to a new projection, and the fast-growing Sun Belt economies that have attracted millions of new residents stand to lose the most.
Rebekah Paxton, research director at the Employment Policies Institute, laid out the damage in an interview with Fox News Digital. The states facing the largest absolute job losses, Texas, Pennsylvania, Georgia, North Carolina, and Florida, share a common trait: they currently sit at the federal minimum wage floor of $7.25 an hour, which has not moved since 2009. Jumping from $7.25 to $25 would more than triple labor costs overnight for employers in those states.
The legislative vehicle is the Living Wage For All Act, backed by Rep. Alexandria Ocasio-Cortez, D-N.Y., and other progressive members of Congress. It would force large employers to pay $25 an hour by 2031 and give smaller businesses until 2038 to comply. The bill would also eliminate the federal tip credit entirely, meaning tipped workers, servers, bartenders, delivery drivers, would have to receive the full $25 in direct cash wages before tips.
More than one-third of the projected job losses fall on the restaurant and hospitality industry alone. The Employment Policies Institute report estimates 1.2 million tipped workers would lose their positions, the very people the bill's sponsors claim to help.
Paxton explained the math in plain terms:
"When you're talking about doubling or tripling the minimum wage, you're talking about doubling and tripling labor costs for businesses in those areas. There may be some businesses that try to absorb that through higher prices, but ultimately what we know from economists, business owners, and workers themselves is that it doesn't always work."
She went further, describing the predictable cascade that follows mandated cost spikes:
"In a lot of ways, it means business owners are going to have to slash jobs and reduce the number of hours that folks are able to work. Our report shows that that's going to cost almost five million jobs across the country."
That pattern, fewer hours, fewer positions, more automation, is not theoretical. It is the documented result of sharp minimum-wage increases in high-cost cities that have already experimented with aggressive mandates. And the Living Wage For All Act would impose those same pressures on states where the cost of living is far lower and small-business margins are thinner.
The irony is that the states most exposed are the ones Americans have been moving to. U.S. Census Bureau figures show the Southeast is booming, with the fastest-growing counties concentrated in Florida, Georgia, and North Carolina. Texas has been a primary beneficiary of post-COVID migration as well. Meanwhile, major metropolitan areas like Cook County, Illinois, and Los Angeles County, California, places with higher minimum wages and heavier regulation, have experienced population decline.
People moved to the Sun Belt for jobs, lower taxes, and affordable living. A federal $25 mandate would undercut all three advantages by forcing employers in those states to absorb cost increases that bear no relationship to local economic conditions. A restaurant owner in rural Tennessee and a tech firm in Manhattan would face the same wage floor, a one-size-fits-all policy applied to an economy that is anything but.
Paxton identified the states most at risk by name:
"Some of the top states that are going to be impacted by a $25 minimum wage include Texas, Pennsylvania, Florida, Ohio, Tennessee... These states have a massive workforce. They also currently abide by the federal $7.25 minimum-wage rate, so a $25 minimum wage represents more than tripling the current minimum wage applicable in those states."
The progressive push to raise the wage floor has become a defining feature of the Democratic Party's left flank. Ocasio-Cortez spoke at a news conference outside the U.S. Capitol on April 29, 2026, pressing for the legislation. She is far from alone; the broader socialist insurgency within Democratic primaries has elevated candidates who treat proposals like the Living Wage For All Act as a baseline, not an aspiration.
The bill's most vocal outside champion is One Fair Wage, a national coalition of more than 100 advocacy organizations and labor unions. Its president, Saru Jayaraman, told Fox News Digital that the proposal has broad appeal, even among voters who back former President Trump.
"We're seeing so many MAGA voters excited about a $25 minimum wage. We see people across the political spectrum, and frankly, the vast majority who are not politically affiliated at all, saying, 'I don't care about Republicans, Democrats, or Independents; what I care about is can I feed my family and who's going to deliver for me?'"
An unnamed One Fair Wage spokesperson pushed back directly on the Employment Policies Institute's five-million-job projection, calling it "inconsistent with decades of minimum-wage research." The spokesperson cited the Economic Policy Institute, a separate, left-leaning think tank not to be confused with the similarly named Employment Policies Institute, as estimating that a federal minimum wage set at two-thirds of the national median wage would raise pay for nearly 40 million workers. The spokesperson also pointed to research from UC Berkeley economist Michael Reich and the Roosevelt Institute, claiming that "ambitious, phased increases at this level raise incomes broadly with little effect on overall employment."
The coalition's framing centers on affordability. "America is in an affordability crisis because work does not pay enough," the spokesperson said, adding that "the federal minimum wage has remained $7.25 since 2009, while rent, groceries, health care, and child care have continued to rise."
That argument has emotional force. But it sidesteps the central question: what happens to the workers who lose their jobs entirely because their employer cannot absorb a 245 percent increase in the wage floor? A raise does nothing for someone whose position no longer exists.
Even as the Living Wage For All Act awaits action in Congress, the wage-hike movement is not waiting. In California and New York, local chapters and union partners have introduced "30 by '30" ballot drives and municipal resolutions targeting a $30-per-hour minimum wage for major employers by the end of the decade. Oakland and New York City are among the high-cost cities in the crosshairs.
The trend toward DSA-backed socialist candidates winning Democratic primaries has only accelerated the push. What was once a fringe demand, $15 an hour, is now treated as insufficiently ambitious by the party's progressive wing. The new floor keeps rising, and the economic modeling that warns of consequences keeps getting waved away.
In Los Angeles, the ambitions are already colliding with reality. On July 1, 2025, airport workers rallied at City Hall in support of an Olympic Wage ordinance that would raise the minimum wage for tourism workers to $30 an hour by 2028. But the City Clerk's office halted the measure to review whether a business coalition's petition drive had gathered enough valid signatures to overturn it. That fight, workers demanding more, businesses organizing to block the mandate, is a preview of what a national $25 floor would trigger in every state.
The One Fair Wage spokesperson framed the bill's structure as reasonable, noting that "the largest corporations move first, smaller businesses have years to adjust, and federal subminimum wages end, ensuring tipped workers receive the full minimum wage with tips on top." The spokesperson insisted that "one job should be enough to live on" and urged Congress to pass the Living Wage For All Act.
But "years to adjust" is a generous description of what the bill actually demands. Smaller businesses would face a deadline of 2038, roughly twelve years from now, to reach $25 an hour. That sounds like a long runway until you consider that many of those businesses operate in states where the current minimum wage is $7.25. A diner in rural Ohio or a landscaping crew in east Tennessee would need to find a way to pay workers three and a half times what they pay today. Some will raise prices. Some will cut staff. Some will close.
The rising influence of democratic socialist candidates in the Democratic Party means proposals like this one are no longer messaging bills designed to die in committee. They reflect the actual policy ambitions of a faction that has won primaries, built coalitions, and moved the party's center of gravity leftward on labor issues. Even Democratic establishment figures have struggled to slow the momentum.
The dispute between the Employment Policies Institute and One Fair Wage comes down to a fundamental disagreement about what happens when government mandates a price for labor that exceeds what the market will bear. One side points to research suggesting modest, phased increases cause little disruption. The other points to the sheer scale of the proposed jump, from $7.25 to $25, and argues that no phasing schedule can absorb a shock that large without massive job losses.
Both sides claim to speak for workers. But only one side has to answer for what happens when five million positions vanish from the economy. The workers who keep their jobs get a raise. The workers who lose theirs get nothing, no wage, no hours, no path forward.
Washington can mandate a number on a pay stub. It cannot mandate that the job still exists when the bill comes due.
