Sen. Chris Murphy Proposes Raising Federal Minimum Wage to $25 an Hour Over 12 Years

Sen. Chris Murphy (D-CT) introduced the Senate version of the Living Wage for All Act, a bill that would raise the federal minimum wage from $7.25 to $25 an hour over 12 years, a 245 percent increase. The Competitive Enterprise Institute reports that larger employers would be required to reach $25 within five years. Smaller businesses would have until 2039, but would still face a $20 floor within four years, higher than any current statewide minimum.

The bill also eliminates subminimum wages, which apply to tipped workers and some employees with disabilities.

Murphy appeared on NBC to make his case, saying: "The Democratic Party has been historically way too timid in taking on corporate power. I think we have to understand that people do not believe that this version of capitalism has worked. And frankly, it hasn't worked." He added: "We can afford it. It's not like we can't pay a $25 minimum wage; we just choose not to because we've become okay with dozens and dozens of people in this country making hundreds of billions of dollars."

What the Data Shows

The Competitive Enterprise Institute notes that 99 percent of U.S. employees already earn above the current $7.25 federal minimum, because local labor markets and productivity have pushed wages higher on their own. According to the Cato Institute, the median effective minimum wage was $13.73 as of January 2026. Mandating wages far above that threshold is where economists, including many who are not ideologically opposed to wage floors, say significant economic damage begins.

A Cato Institute study cited by the Competitive Enterprise Institute found that after California raised its minimum wage from $11 to $12, the average affected employee worked five fewer hours per week, fewer workers qualified for employer-sponsored health and retirement plans, and average wages for affected workers actually fell by 13.6 percent once hours and benefits were factored in.

California also lost roughly 18,000 fast-food jobs between 2023 and 2024, following that sector's wage increase from $16 to $20 per hour, per the Competitive Enterprise Institute.

Researchers at the University of California Santa Cruz found, according to legal scholar Jonathan Turley, "a plethora of negative outcomes, such as higher menu prices for consumers, reductions in employee working hours, widespread elimination of overtime, and loss of benefits for employees" in the wake of California's wage mandates. Economics lecturer Stephen Owen was named as the researcher who summarized those findings.

The Competitive Enterprise Institute adds that higher minimum wages also tighten hiring discrimination. A 2023 study found that after a 10 percent minimum wage increase, job vacancies were filled up to 4.5 percent faster, as employers became more selective, resulting in fewer teen, disabled, and less-educated workers being hired. Workers in that group might have accepted lower wages over no job at all.

The Case for Murphy's Position

The strongest argument for the bill is not frivolous. The federal minimum wage has sat at $7.25 since 2009, and inflation has eroded that figure substantially. Murphy's supporters argue that the $25 target is spread across 12 years precisely to give businesses time to adjust, and that the current floor is so far below market reality in most of the country that it offers no meaningful protection to the workers who do earn near it. The Washington Post's opinion section acknowledged that concern and still concluded the bill would "worsen unaffordability."

The Automation Problem Is Real

Turley and the Competitive Enterprise Institute both flag the same structural issue: the bill arrives as automation is already displacing low-wage workers at an accelerating rate. A $25 mandate would, in economic terms, sharpen that incentive for any employer who can substitute a machine or software for a human. Businesses "teetering on unprofitability" don't automate, they close, according to the Competitive Enterprise Institute.

The Competitive Enterprise Institute estimates the bill would raise the minimum wage by an average of 20.4 percent per year for 12 consecutive years, roughly six times the rate of private-sector wage growth. That trajectory would make the federal wage binding in all but the largest, highest-cost cities, putting downward pressure on total compensation for hourly workers nationwide through layoffs, reduced hours, and stripped benefits.

Prospects and What Comes Next

The Competitive Enterprise Institute is direct: the bill is unlikely to pass in its current form. But that does not make the debate meaningless. The Washington Post's opinion page noted that Murphy's proposal gives Democrats a platform on economic populism at a moment when voters are already concerned about both high prices and job displacement from technology.

The unanswered question is whether Murphy's "common good capitalism" framing and the bill's multi-year phase-in structure can actually blunt the employment and price effects that both left-leaning and right-leaning economists have documented in states that have already tried aggressive wage floors. California's experience with fast-food jobs between 2023 and 2024 is the most recent live test, and the results so far have not supported the optimistic projections.