Unintended consequences: Oklahoma minimum-wage hike could fuel illegal-immigrant hiring

Law & Principles

Byron Schlomach, Ph.D. | June 12, 2025

Unintended consequences: Oklahoma minimum-wage hike could fuel illegal-immigrant hiring

Byron Schlomach, Ph.D.

A year from now, Oklahomans will vote on State Question 832, an initiated state statute which would increase the minimum wage in this state to $15 over a few years and force all working positions to be subject to the minimum wage. 

The effort to increase the minimum wage to $15 an hour has been ongoing for some time across the nation. With no success at the federal level, activists have turned to pushing initiatives in states like Oklahoma—mostly western states where initiatives (citizen-proposed statutes) are enshrined in state constitutions.

Two age-old proverbs apply when considering SQ 832: “The road to hell is paved with good intentions” and “There are always unintended consequences of public policies.” 

SQ 832 will encourage exactly what President Donald Trump was elected to combat: illegal immigration.

It turns out that SQ 832 will encourage exactly what President Donald Trump was, likely more than anything else, elected to combat: illegal immigration.

How, you might ask, could a minimum wage possibly encourage illegal immigration?

As an economic policy, the minimum wage is a price floor for labor. In other words, it is a minimum price that can be accepted (paid) by a buyer (employer) and charged (received) by a seller (employee).

Price floors always result in some potential buyers refusing to buy, or buying less than they otherwise would. Meanwhile, potential suppliers increase in number (as compared to the number of suppliers with a lower price that would occur in a truly free market). 

For now, let’s ignore the supply side of the market and consider only the demand (employer) side. Some employers will forgo labor as much as they can by relying on automation or by forgoing some services (maybe factories don’t stay as clean). However, some will look for other alternatives, especially when it’s difficult to substitute machines for necessary labor. Some, whether out of financial desperation or the pursuit of pure profit, will hire labor for less than the minimum wage.

But, you might say, it’s illegal to hire for less than the minimum wage. Besides, who would work for less than the minimum? What’s more, how could such an unscrupulous employer get away with doing such a thing?

Needy Oklahoma teenagers, priced out of the labor market by the minimum wage, are replaced in the workplace by illegal immigrants.

The answer is simple. It’s easy to get away with paying an illegal wage when the labor being paid for is itself illegal. 

An illegal immigrant, almost by definition, is not going to turn in an employer for paying less than the minimum wage—for the simple reason that the illegal immigrant would risk being discovered and deported. With most illegal immigrants being from Mexico, sums less than $15 an hour are considered downright princely. The fact that dollars go further in Mexico was a familiar refrain heard by my schoolteacher wife when she taught immigrant children in Arizona.

Meanwhile, Oklahomans such as needy teenagers—priced out of the labor market by the minimum wage—are replaced in the workplace by illegal immigrants. Then, these Americans are denounced as being “unwilling” to do certain jobs that “only immigrants will do.”

You think this is far-fetched? Well, consider another well-intentioned labor law that prohibits “child” labor. I know a pipeline welder who regularly saw welding helpers on the job who he knew were underage. He also knew these helpers were illegally in the country. Meanwhile, this man’s own son couldn’t work with him because the boy was underage, and even if the man and his son promised not to tell and agreed to the same wage as the underage illegals, there was no way the employer would take the chance. 

That welder acquaintance often wonders if his son might have stayed away from drugs (and jail) if the boy had been allowed to work with his dad.

SQ 832 may be offered up with the best of intentions. But just keep in mind that by voting to raise wages artificially from what the domestic labor market will bear, you will also be voting to encourage illegals to cross the border and find jobs illegally paying less than the minimum wage (but more than the current market wage). 

You will also be voting to idle youth who might otherwise be able to find a legitimate job. And you will be voting to redirect some of those idle youth into illegal activities where they can make a buck—even as many in society say they’re too lazy to do the jobs illegals do.

Byron Schlomach, Ph.D.

Contributor

Byron Schlomach (Ph.D. in economics, Texas A&M University) has served as director of the Center for Economic Prosperity at the Goldwater Institute and as chief economist for the Texas Public Policy Foundation. He has also served as scholar-in-residence at the Institute for the Study of Free Enterprise at Oklahoma State University. Write to him at redneckeconomist@reagan.com.

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