A federal minimum wage of $25 would destroy nearly 5 million jobs and hit Texas and Florida the hardest

A federal $25-per-hour mandate would destroy nearly 5 million jobs in the United States and would hit Texas, Florida and other states in the Sun Belt that currently follow the federal minimum wage of $7.25, according to a report cited by Fox News.

Left-wing lawmakers are pushing to raise the federal minimum wage to $25 by 2031 for large companies and by 2038 for small businesses. The plan would also eliminate the federal tip credit, so that waiters and other tipped workers would receive $25 in cash. The federal minimum wage has been at $7.25 since 2009.

The blow to the Sun Belt

Rebekah Paxton, director of research at the conservative-leaning Employment Policies Institute (EPI), called it a "job killer." The EPI projects a loss of nearly 5 million jobs. Texas, Pennsylvania, Georgia, North Carolina and Florida would suffer the largest absolute losses.

Paxton told Fox News Digital: "Some of the top states that are going to be impacted by a $25 minimum wage include Texas, Pennsylvania, Florida, Ohio, Tennessee … These states have a massive workforce. They also currently abide by the federal $7.25 minimum-wage rate, so a $25 minimum wage represents more than tripling the current minimum wage applicable in those states."

Texas, North Carolina, and Florida have been among the major destinations for post-COVID migration. While counties like Cook in Illinois and Los Angeles were losing population, the Census shows a boom in the Southeast.

Paxton warned that tripling the minimum wage is equivalent to tripling labor costs. "There may be some businesses that try to absorb that through higher prices, but ultimately what we know from economists, business owners, and workers themselves is that it doesn't always work." In practice, she said, "it means business owners are going to have to slash jobs and reduce the number of hours that folks are able to work." 

According to the report, more than a third of the projected job losses would be concentrated in restaurants and hospitality, including 1.2 million tip-dependent workers.