Congress proposes regional minimum wage tied to local cost of living
H.R. 3438 — Fair Wage Act of 2025 · Filed by Brian Fitzpatrick (R-PA) · 2 cosponsors · Introduced May 15, 2025 · Referred to committee
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What it does
This bill replaces the federal minimum wage with a regional, cost-of-living-adjusted system. Starting at 40% of the national average hourly wage (rising to 50% over two years), the minimum wage varies by metropolitan area and county based on local price levels, with adjustments ranging from 87.5% to 115% of the base. Tipped workers' minimum cash wage becomes 30% of the regional minimum, and workers 18 and under earn two-thirds of the regional rate. Workers and low-income households benefit from higher, locally calibrated wages; employers face higher labor costs.
Why we flagged it
The bill's core mechanism is a comprehensive restructuring of the federal minimum wage from a single national floor to a regional, cost-of-living-indexed system. This is a direct labor-standards reform, not a narrow carve-out or procedural measure.
What the text implies
- Regional variation may create wage arbitrage incentives, potentially encouraging employers to relocate to lower-cost areas or shift work to nonmetropolitan counties.
- The tipped minimum (30% of regional wage) may still leave tipped workers below subsistence in high-cost metros, depending on tip income assumptions.
The full analysis lists 4 implications of this text.
Who stands to gain
low-wage workers and service-sector employees; workers in high-cost metropolitan areas