Ocasio-Cortez Backs $25 Wage Plan as Federal Rate Stalls
Rep. Alexandria Ocasio-Cortez is backing a plan to raise the federal wage floor to $25 an hour, a move Democrats and supporters say would more than triple the current rate. The federal minimum has sat at $7.25 an hour since 2009, leaving most workers nationwide covered by a standard that Congress last changed through a three-step increase passed in 2007.
The plan is being promoted with support from a coalition of more than 100 organizations. Businesses facing higher labor costs may respond by raising prices, reducing staff or cutting hours.
Ocasio-Cortez and the $25 Plan
Ocasio-Cortez backed the plan at a news conference outside the U.S. Capitol on April 29, 2026. The proposal would set one federal minimum wage of $25 an hour, replacing the current $7.25 floor that federal law requires most workers to receive.
The proposal comes after years without a change at the federal level. Congress last raised the wage through a three-step increase that moved it from $5.15 to $5.85 in 2007, then to $6.55 in 2008, and finally to $7.25 in 2009.
Federal Wage Since 2009
The current rate also sits well below an inflation-adjusted equivalent of $11.34 an hour today. That gap is part of why the debate has returned, even as minimum wages vary sharply across states.
California and New York both have minimum wages above $16 an hour, while Georgia’s minimum wage is $5.15 an hour. A federal increase to $25 would overtake both state floors and create a single national standard at a much higher level.
Business Costs and Santiago Vidal Calvo
Santiago Vidal Calvo, a Manhattan Institute Cities policy analyst, warned in March that wage hikes can leave out the trade-offs employers face. “That’s one of the common fallacies people fall into — many believe raising the minimum wage will solve everything, that wages will go up while pric”
His warning tracks the main pressure point in the debate: employers paying more for labor may try to offset the change by changing prices, trimming hours or cutting staff. For workers already at the bottom of the pay scale, the question is whether the higher floor reaches their paycheck before businesses adjust their operations.
More Than 100 Organizations
The coalition behind the plan includes more than 100 organizations, giving the proposal an organized lobbying push as it heads into the next round of debate. For workers in states with low minimums, the plan would matter immediately; for workers in states already above $16 an hour, it would still reset the federal baseline far above current law.
For now, the fight centers on whether Congress will move the federal wage from a 2009-level floor to $25 an hour, and whether employers would absorb the cost, pass it on, or cut back on payroll to make room for it.
