This week, Senator Bernie Sanders (I-VT) and his colleagues introduced legislation aimed at raising the federal minimum wage to $17 an hour and eliminating the tip credit for restaurant workers.
An original EPI analysis–published in 2023 when Sanders first introduced similar legislation–shows that the proposal could cost millions of jobs. The analysis found that a $17 federal minimum wage would result in over 1.2 million jobs lost across the country. Eliminating the federal tip credit on top would slash another 447,000 jobs.
A few states with the highest projected losses include: Texas (up to 337,088 jobs lost), Pennsylvania (up to 130,059 jobs lost), North Carolina (up to 98,316 jobs lost), Georgia (up to 97,375 jobs lost), and Indiana (up to 76,998 jobs lost).
However, Senator Sanders’ proposal will face an uphill battle, both in Congress and in public opinion.
In the 2024 elections, California rejected an $18 an hour minimum wage proposal. The rejection was the first wage proposal to fail in state history, and the first to fail nationally in 30 years. The rejection came shortly after the state raised the fast food minimum wage to $20 an hour and residents quickly saw the negative impacts, currently totaling over 16,000 lost jobs.
Tip credit elimination laws have also fared poorly. Massachusetts resoundingly rejected a ballot question to eliminate the tip credit for restaurant workers in the 2024 election. Additional efforts to eliminate the tip credit last year failed from states like Ohio, to Maryland, Arizona, and Illinois. Michigan tipped workers also worked tirelessly to save their tip credit after an activist organization, One Fair Wage, spent years in court battles to eliminate the tip credit.
The legislation also isn’t supported by economists or workers.
A survey of economists revealed that a strong majority (62%) oppose raising the minimum wage to even $15/hour, with most of this group (50%) “strongly” opposing the raise. A national survey of tipped workers shows that 90% want to keep the tipping system as it is and 87% believed their earnings would drop if the tip credit were to be eliminated.
Read the full analysis here.