Minimum Wage

The Hidden Problem With Democrats' $25 Minimum Wage Bill

The legislation would eliminate the tip credit for restaurant workers and other tipped employees—which has not worked out well in the past.

C. Jarrett Dieterle and Kurt Huffman | 7.18.2026 7:00 AM

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Across the country, progressive politicians continue to push for an ever-higher minimum wage. Whether it's New York City's Mamdani-led pursuit of $30 by '30, L.A.'s $30 "Olympic wage" for hotel workers, or Seattle's minimum wage for the gig economy, it's clear that the fight to raise the minimum is only escalating. Now, congressional Democrats have waded into the debate with the introduction of the Living Wage for All Act, spearheaded by Sen. Chris Murphy (D–Conn.).

Sen. Murphy's bill has garnered attention for seeking to increase the federal minimum wage from its current level at $7.25 per hour all the way up to a $25 per hour minimum in the coming years. (This would act as a wage floor, applying in any state that had a lower wage than the feds). But overlooked in the reporting so far is another key feature of the bill: its elimination of the tip credit for restaurant workers and other tipped employees.

The tip credit is what allows waiters and others in the hospitality industry to be paid below the statutory minimum wage on a per-hour basis, so long as their tips make up the difference. This legal structure has been a staple of the restaurant industry for over 60 years, and it often allows waiters to make far more than the minimum wage. (The national median wage for waiters is $27 per hour, according to the National Restaurant Association.)

Scrapping the tip credit could hurt both restaurants and tipped workers, especially when considering how customer behavior,........

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