New federal minimum wage law in the works: Here’s the proposed amount and the path to approval

An initiative to raise the federal minimum wage is circulating on Capitol Hill, originating from an unlikely place: the office of Missouri Sen. Josh Hawley, a staunch Trump ally.

Hawley is one of the few Senate Republicans voicing concern over the House-passed spending and tax bill, which independent estimates project could strip more than 10 million from Medicaid. The Missouri leader has warned his party that the November election shows that working-class voters are seeking relief and support from the Republican party, and that cuts to Medicaid will betray that trust.

Hawley’s proposal to increase the federal minimum wage

On Tuesday, Hawley introduced a bill that would raise the federal minimum wage from $7.25 to $15, starting in January 2026. The proposal would also ensure that the minimum wage is not undermined by inflation, allowing for an annual adjustment based on the movement of prices. Sen. Peter Welch, a Democrat from Vermont, co-sponsored the legislation—a sign that the measure, which enjoys broad public support, could gain bipartisan traction.

“When adjusted for inflation, the current federal minimum wage is lower than at any point since the 1940s,” Hawley said in a press release following the bill’s introduction. At the same time, workers are facing higher costs for housing, education, healthcare, and other essential goods and services.

Over the last year, the average price of health insurance has grown by 2.9 percent, while that for automobiles has surged by 7 percent. Although the May Consumer Price Index report showed that inflation is slowing, housing prices rose 0.3 percent over the month; since May 2024, rents have increased by nearly 4 percent.

The Bureau of Labor Statistics also reported this week that real wages, which account for the impact of price increases (or decreases), have risen 1.4 percent over the last year.

Why increasing the minimum wage can help workers who earn more than $7.25

Although fewer than 1 million workers currently earn the federal minimum wage, advocates argue that the wage floor suppresses earnings across the board. If a worker earning $7.25 an hour sees their pay rise to $15, others earning between those figures are also likely to see increases, rippling upward along the wage ladder.

Sen. Hawley and Sen. Weltch’s bill is not the only one to be introduced that would boost wages for workers with the lowest incomes. The Raise the Wage Act of 2023 was a more generous bill, as it would have increased the federal minimum wage to $17 an hour by 2028, which the Economic Policy Institute estimates would boost incomes for nearly 28 million workers, representing around 19 percent of the U.S. labor force.

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