What Is the Raise the Wage Act of 2025?
The Raise the Wage Act of 2025—introduced by Senator Bernie Sanders and co-sponsored by 32 other senators—seeks to gradually raise the federal minimum wage from $7.25 to $17 per hour by 2030. The bill, recently presented in Congress, also targets the elimination of subminimum wages for tipped workers, young employees, and workers with disabilities.
The legislation comes amid growing concern that the current federal wage—unchanged since 2009—is failing to meet basic living costs for millions of Americans.
Minimum Wage Increase Schedule Through 2030
Here is the proposed phased wage increase:
| Year After Enactment | Minimum Wage |
|---|---|
| Effective Date | $9.50/hour |
| Year 1 | $11.00/hour |
| Year 2 | $12.50/hour |
| Year 3 | $14.00/hour |
| Year 4 | $15.50/hour |
| Year 5 | $17.00/hour |
| Year 6+ | Indexed to Median Hourly Wage |
After 2030, the federal minimum wage will adjust annually based on changes in the median hourly wage, as determined by the Bureau of Labor Statistics.
Ending Subminimum Wages for Tipped and Disabled Workers
The bill also phases out subminimum wages that currently apply to:
- Tipped workers, whose base wage is often as low as $2.13/hour in some states
- Youth workers under age 20
- Employees with disabilities working under Section 14(c) certificates
These categories will see step-by-step wage hikes until they reach parity with the federal minimum wage. For instance, tipped workers’ base pay will rise from $6.00/hour to $17.00/hour over six years. After that, all workers—regardless of tipping status—must be paid the full minimum wage.
Who Benefits from the Wage Increase?
According to the Economic Policy Institute (EPI), the legislation would immediately benefit 213,000 workers in New York alone. Nationwide, the EPI estimates that one in four U.S. workers currently earns less than $17/hour.
Populations most impacted include:
- Black and Hispanic workers
- Women of color
- Workers in food service and retail industries
Senator Kirsten Gillibrand noted that, “A living wage is critical to make sure that Americans can pay their bills, feed their families, and put a roof over their heads.”
Support and Opposition
The bill is backed by more than 85 labor and advocacy organizations, including:
- AFL-CIO
- SEIU
- Economic Policy Institute (EPI)
- National Employment Law Project (NELP)
- One Fair Wage
Supporters argue the act will reduce poverty and narrow wage gaps, especially for marginalized communities. Critics, however, have historically raised concerns about potential impacts on small businesses and job creation—though those arguments are not prominently cited in this version of the bill.
What’s Next?
The bill has been referred to committee and awaits further deliberation. If passed, it would take effect on the first day of the third month following enactment, initiating the first increase to $9.50/hour.
The outcome will have sweeping implications for millions of workers—and for the future of wage policy in America.
Stay informed on wage changes and labor policy. Bookmark this page for updates as the bill moves through Congress.
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