Warning Over $25 Minimum Wage Bill: Why Target and Walmart Might See Massive Legislative Changes

A proposed $25 (approximately £19)-an-hour minimum wage for staff at major US employers including Walmart and Target would mark the biggest federal pay rise in modern American history, but it will only happen if Congress approves the Living Wage for All Act before 3 January 2027.

Introduced by Democratic Representative Delia Ramirez of Illinois, the bill seeks to lift the federal wage floor gradually. Neither retailer is currently required under federal law to pay every worker $25 (approximately £19) an hour.

The proposal arrives after a long period without a rise in the federal minimum wage. The national rate has remained at $7.25 (approximately £5.47) an hour since 2009, while several states have adopted higher minimums. For workers facing rising living costs, the gap between the federal baseline and the proposed rate is substantial.

How a $25 Wage Floor Would Roll Out Across the US

The Living Wage for All Act, introduced in April, would establish a phased route towards a $25 (approximately £19) hourly minimum wage for large employers by 2031, according to the bill text. Other employers would have until 2038 to reach the proposed rate.

The legislation also proposes linking future federal minimum wage increases to two-thirds of the national median hourly wage. Rather than leaving every future adjustment to a separate vote in Congress, this formula would provide a mechanism for subsequent rises if enacted.

That approach could give some workers a clearer path towards higher pay. However, the bill remains a proposal, not a change to existing federal law. Its timetable would depend on congressional approval and the legislation's final terms.

Tipped workers could also see major changes. The bill proposes phasing out lower federal minimum wage rates for employees who receive tips. It would gradually move them towards the same minimum wage as workers who do not rely on gratuities.

The change could affect businesses whose pay arrangements depend on customers making up part of employees' earnings. Its practical impact would likely vary by employer, workforce and the wage rules already in force.

Walmart, Target and Who Would Be Covered

Supporters argue that the current federal wage floor has fallen out of step with the financial pressures facing workers. Ramirez has said that many companies report strong earnings while employees struggle to make ends meet. Her proposal aims to address that imbalance through a higher national wage standard.

April Verrett, president of the Service Employees International Union, has also backed the legislation and called it an important step towards higher wages. Support from labour organisations could help maintain pressure on lawmakers. However, backing from unions alone cannot guarantee the bill's passage.

Opponents, meanwhile, warn that imposing a steep increase could create problems for employers and workers. Rebekah Paxton, research director at the Employment Policies Institute, has argued that the proposed changes could have negative employment consequences.

Paxton cited an estimate suggesting there could be five million fewer jobs nationwide. That figure reflects an argument against the proposal, not a confirmed prediction of what would happen if the bill became law. The available material does not set out the assumptions behind that estimate, so it should not be treated as a settled outcome.

For Walmart and Target, the distinction between a proposed requirement and an existing obligation matters. Both retailers could face changes if the legislation passed in a form that covered their operations. At present, neither faces a federal requirement to pay all employees $25 (approximately £19) an hour.

The broader question is how Congress should balance higher earnings for workers against concerns about employment costs. A higher wage floor could increase pay for eligible employees, while critics argue that employers might respond in ways that affect hiring. The eventual effects would depend on the final law and how businesses adjusted.

Tight Timeline in Congress

Lawmakers have until 3 January 2027, when the current congressional session ends, to pass the bill during this session. If it does not advance, supporters would need to pursue similar legislation again in the next session.

For now, the federal minimum wage remains $7.25 (approximately £5.47) an hour. The Living Wage for All Act has not changed that rate. Its proposed deadlines are not guaranteed outcomes.

The coming months will determine whether Congress considers the measure before the session closes. Until lawmakers pass it and it becomes law, the proposed $25 (approximately £19) minimum wage remains a potential change, not a requirement facing American employers.