Original LAW Act
- Bill Number
- H.R. 122
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2025-01-03: Referred to the House Committee on Education and Workforce.
- Last Updated
- 2025-07-21T19:44:15Z
AI-Generated Summary
Purpose
The Original Living American Wage Act (H.R. 122) aims to update the federal minimum wage to better reflect living costs, ensuring it supports a family above poverty levels. It ties future wage adjustments to a poverty threshold measure, addressing findings that the current minimum wage leaves many workers unable to afford basic needs like housing.
Key Provisions
- Phased Wage Increases (2026–2030): The bill sets specific hourly minimum wage rates under the Fair Labor Standards Act (FLSA), escalating annually:
- $10.59 beginning January 1, 2026.
- $14.59 beginning January 1, 2027.
- $18.59 beginning January 1, 2028.
- $22.59 beginning January 1, 2029.
- $26.59 beginning January 1, 2030.
- Long-Term Adjustment Formula (2031 Onward): Starting January 1, 2031, and every seven years thereafter, the U.S. Secretary of Labor must calculate the minimum wage using a formula. This ensures an annual income (based on 1,799 work hours) that is 40% higher than the Federal Supplemental Poverty Measure (SPM)—a Census Bureau estimate of poverty that includes costs like housing, food, and taxes—for a renting family of four (two adults, two children under 18). The rate is published in the Federal Register by November 1 of the determination year.
- Non-Decrease Clause: If the formula results in a wage lower than the current rate, the Secretary cannot reduce it.
- Congressional Sense: The bill expresses that the minimum wage should adjust if inflation exceeds 5% over two years, allow two full-time workers to afford housing (paying no more than 30% of income on rent), and permits states, localities, tribes, or other governments to set higher minimum wages.
Significant Changes to Existing Law
- Amends Section 6 of the FLSA (29 U.S.C. 206), which currently sets a flat federal minimum wage of $7.25 per hour (unchanged since 2009).
- Introduces a structured escalation from the current rate to $26.59 by 2030, replacing static levels with inflation- and poverty-linked adjustments.
- Shifts long-term responsibility to the Secretary of Labor for periodic recalculations, based on SPM data from the Bureau of Labor Statistics (noting a reference to the Census Bureau in the bill's title).
Potential Impacts
- On Citizens: Low-wage workers (estimated 1.3 million directly affected, plus indirect benefits for families) could see income rises, potentially reducing poverty for about 37.9 million Americans and improving access to housing, education, and healthcare. However, higher costs might affect consumer prices.
- On Government Agencies: The Department of Labor gains duties to calculate and publish rates every seven years, increasing administrative workload. The Bureau of Labor Statistics provides data support.
- On Employers: Businesses, especially small ones and in low-wage sectors like retail or service, face higher labor costs, which could influence hiring or automation.
- On International Relations: Minimal direct impact, though it may affect U.S. competitiveness in global labor markets by raising wage floors.
Main Stakeholders Affected
- Low-Wage Workers and Families: Primary beneficiaries, particularly renters and those in poverty, gaining higher pay to meet living expenses.
- Employers and Businesses: Bear increased payroll costs, with small businesses potentially facing greater challenges.
- State and Local Governments: Empowered to exceed federal rates, allowing tailored policies; some may align or exceed to address local costs.
- Federal Agencies: Department of Labor (enforcement and calculations) and Bureau of Labor Statistics/Census Bureau (data provision).
- Advocacy Groups: Poverty and labor organizations (supporters) versus business lobbies (potential opponents).
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens FLSA enforcement by mandating formula-based updates, but could invite lawsuits over calculation methods or preemption of state laws (though the bill explicitly allows higher state minima). The SPM basis introduces data-driven flexibility, reducing arbitrary congressional adjustments.
- Constitutional: Aligns with Congress's Commerce Clause authority to regulate wages affecting interstate commerce; no clear First Amendment or due process issues, but economic mandates might raise Takings Clause concerns if seen as property burdens on employers.
- Political: Reflects debates on income inequality and living wages, potentially polarizing along partisan lines (e.g., progressive support for poverty ties vs. conservative worries over business impacts). As an introduced bill (January 3, 2025), it requires committee approval and faces hurdles in a divided Congress, with findings highlighting urgency amid stagnant wages since 2009.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2025-01-03: Referred to the House Committee on Education and Workforce.
- 2025-01-03: Introduced in House
- 2025-01-03: Introduced in House
Bill Versions
- Original Living American Wage Act — issued 2025-01-03 — PDF (5 pages)