Officials in California, already one of the nation’s highest-cost states, have added fuel to the fire in recent years by mandating or proposing dramatic wage increases for certain workers that further drive up the cost of basic goods and services.

The negative economic repercussions of those decisions may not be isolated to California, but could be felt in Oklahoma thanks to a proposal that would tie mandatory wages in Oklahoma—everywhere from Oklahoma City to Boise City—to the cost of living in places like San Francisco.

State officials have warned the proposal could lead to job losses and severely curtail job creation in Oklahoma since wages will be driven well above market norms, leading to higher unemployment and less financial security for workers.

A group called “Raise the Wage Oklahoma” has filed paperwork to conduct an initiative-petition effort to place a measure on the ballot calling for a dramatic escalation in Oklahoma’s minimum wage by tying it to the cost of living in urban areas around the nation.

The proposed State Question 832 would mandate annual increases in Oklahoma’s minimum wage based on increases in the cost of living in the nation’s urban centers, as measured by the U.S. Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers.

Because Oklahoma is one of the nation’s lowest-cost states, the measure would effectively mandate rapid increases in wages far above market rates in Oklahoma, based on the cost of living in places like San Francisco and New York City.

In 2024, Oklahoma City was ranked the nation’s sixth most-affordable city to live in, with average costs 11 percent below the national average.

In contrast, four of the 10 most-expensive cities in the country were in California: San Jose (74 percent above the national average), San Francisco (58 percent above the national average), San Diego (56 percent above the national average), and Los Angeles (46 percent above the national average). New York City was the nation’s second-most expensive city to live in, with costs that were 71 percent above the national average.

In 2024, Forbes reported that $33,966 per year was sufficient to pay for basic housing, healthcare, taxes, food, and transportation in Oklahoma. In contrast, a California resident needed $53,171 to pay for the same things in that state.

SQ 832 would not simply bump the minimum wage in Oklahoma City and Tulsa, but would also impact employers in rural communities across the state where the cost of entry-level jobs would be tied to the cost of living in major national urban centers.

An analysis by The State Chamber of Oklahoma and Oklahoma Farm Bureau found that SQ 832 could inflate Oklahoma’s minimum wage to $35.61 per hour within 15 years. In practical terms, that would mean jobs would be shifted elsewhere and many Oklahomans would receive no benefit.

The Congressional Budget Office projected that a far smaller nationwide increase in the minimum wage—raising the wage to $17 an hour by July 2029—would cause 700,000 additional workers to be jobless.

Chad Warmington, president and CEO of The State Chamber, said employers are concerned about the “automatic, open-ended increase being linked to a federal-government-produced index that is based upon cost-of-living rates in cities like New York or San Francisco,” which are “not reflective of the actual cost of living in Oklahoma.”

Steve Thompson, Oklahoma Farm Bureau vice president of public policy, warned that the proposal would raise business costs in Oklahoma based on “national economic projections that are unrepresentative of Oklahoma’s economy.”

And the policy decisions made by officials in California and other expensive, left-wing states could further exacerbate the problem.

Officials in Los Angeles are currently considering a measure to increase the minimum wage for hotel and airport workers to $30 an hour by 2028, while also imposing a new $8.25 per hour mandatory health care contribution for employers.

That action would come on top of a statewide $20 minimum wage mandate for fast-food workers that went into effect in California in April 2024. A study published in the National Bureau of Economic Research concluded that the California mandate for fast-food wages cost 18,000 jobs.

Rachel Greszler, a senior research fellow in workforce and public finance in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, noted that a recent survey of California restaurant owners showed the mandatory increase in fast-food workers’ pay caused 89 percent of restaurants to reduce employees’ hours while 98 percent increased menu prices with 93 percent saying they expected to raise prices again in the next year.

Greszler wrote that the proposed mandatory hike in pay for hotel and airport workers will increase the cost of living even more in Los Angeles.

The proposed mandatory wage for hotel and airport workers in Los Angeles comes out to $79,560 per year, which Greszler noted is more than twice the average compensation for hospitality industry employees across the U.S.

She wrote that the proposal’s impact likely means “price increases for consumers would also be magnified.” As a result, she warned that the 2028 Summer Olympics in Los Angeles “may become an event limited not only to elite athletes, but to financially elite spectators” able to afford the high hotel prices.

Under SQ 832, those high California prices could translate into another mandatory increase in business expenses in Oklahoma, even in years in which profits are down and the cost of living in Oklahoma is otherwise stable.