S 4981: Living Wage For All Act

S 4981 in plain English: This bill would raise the federal minimum wage to $25 per hour, with separate phase-in schedules for large employers (those with $1 billion or more in annual revenue or 500 or more employees) and smaller employers. Large employers would reach $25 per hour after 5 years, while smaller employers would reach $25 per hour after 12 years.

Stated purpose

The bill aims to raise the federal minimum wage to $25 per hour and then tie it permanently to two-thirds of the national median hourly wage going forward, with large corporations required to reach that level faster than smaller employers. It also seeks to eliminate all subminimum wages.

Key points

• Sets a $25 per hour federal minimum wage as the ultimate target for all employers
• Large employers (≥$1B revenue or ≥500 employees) must reach $25/hr within 5 years, starting at $12/hr
• Smaller employers follow a slower 12-year phase-in, also starting at $12/hr and reaching $25/hr
• Tipped workers at large employers see their base wage rise from $6.00/hr to full minimum wage over time
• After $25/hr is reached, wages continue rising beyond that level for both employer categories

Arguments supporters make

• Tying the minimum wage to two-thirds of the median wage keeps it from eroding over time, so Congress does not have to repeatedly act to prevent low-wage workers from falling further behind
• Large, profitable corporations can absorb higher labor costs more easily than small businesses, and the tiered schedule reflects that by giving smaller employers more time to adjust
• Raising the wage floor reduces workers' reliance on government assistance programs, which can lower public costs over time

Arguments opponents make

• Even with a longer phase-in, smaller businesses operating on thin margins — especially in lower-cost regions of the country — may be forced to cut hours, reduce staff, or close rather than absorb steep and repeated wage increases
• Permanently indexing the minimum wage to median wages removes Congress's ability to respond to economic downturns or regional differences, locking in increases even when conditions might not support them
• Critics argue that a single national wage floor does not account for the wide variation in cost of living across states and cities, meaning $25/hour may be a hardship for rural employers while still being inadequate in high-cost urban areas

Tradeoffs

Higher wages for low-paid workers come at the cost of increased labor expenses for employers, with the burden falling unevenly on smaller businesses and those in lower-wage regions; the tiered schedule attempts to ease that tension but extends the period of wage inequality between workers at large and small employers.

Current status in Congress: In committee.

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