Congress moves to raise minimum wage to $25, index it to inflation
S. 4981 — Living Wage For All Act · Filed by Christopher Murphy (D-CT) · 4 cosponsors · Introduced Jul 14, 2026 · Referred to committee
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What it does
This bill raises the federal minimum wage to $25/hour over 5–12 years depending on employer size, then indexes it annually to two-thirds of the national median wage. Large employers ($1B+ revenue or 500+ employees) reach $25/hour in 5 years; smaller employers get 12 years. It also eliminates the separate lower minimum for tipped workers and workers with disabilities, phasing them into the main wage floor. Workers benefit from higher pay and wage indexing; employers face significant labor-cost increases on a staggered timeline.
Why we flagged it
The bill's core mechanism is a phased federal minimum wage increase to $25/hour with automatic annual indexing to median wages. This is the stated purpose and the entire functional substance of the legislation.
What the text implies
- Elimination of subminimum wages for tipped and disabled workers may reduce hiring in those categories if employers cannot absorb costs; transition assistance is mentioned but not funded.
- Indexing to two-thirds of median wage creates a wage floor that rises with overall economy, potentially accelerating wage inflation in high-cost regions and compressing wage differentials across skill levels.
The full analysis lists 4 implications of this text.
Who stands to gain
low-wage workers; workers with disabilities; tipped service workers