Economy

Experts: ‘Living wage’ means fewer jobs, less money for workers

October 24, 2025

Ray Carter

Efforts to impose a so-called “living wage” in Oklahoma based on the cost of living in major urban centers would eliminate thousands of jobs statewide, reduce many workers’ overall pay due to fewer hours worked, and negatively impact state gross domestic product, experts warned lawmakers during a legislative study this month.

“When we make it harder for small businesses to compete for work, we’re not lifting people out of poverty,” said Bradley Ward, a fiscal analyst who is the deputy state director for Americans for Prosperity–Oklahoma. “We’re shutting the door on them completely.”

The study was conducted even as an initiative-petition effort is ongoing to tie Oklahoma’s mandatory minimum wage to the cost of living in places like New York City and San Francisco, escalating the pay for entry-level jobs in Oklahoma far above market rates.

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.

According to MIT’s Living Wage calculator, a “living wage” in Oklahoma would involve $42,135 for a single adult with no children. But that same individual would need to earn $59,740 in California and $57,337 in New York to enjoy the same standard of living.

While SQ 832 would mandate that entry-level jobs pay at least $15 an hour by 2029, the wage would continue to escalate thereafter based on the cost of living in 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.

Officials with the National Federation of Independent Business (NFIB) have simulated the real-world impact that style of wage system would have in Oklahoma.

Peter Hansen, director of research and policy analysis at NFIB, said there would be a modest initial benefit to Oklahoma’s gross domestic product (GDP) as some workers experience higher pay.

But that bump would be negated by the negative impacts of artificially high wages within just a few years.

Among other things, mandating wages above market levels would cause business investment to shift away from Oklahoma to other locales, Hansen noted.

By 2033, the impact will turn negative, and by 2035, state GDP would be roughly $700 million lower than if no change were made to the state’s minimum-wage law. And the damage grows from there.

“Those negative effects just continue to accumulate over time,” Hansen said.

By 2031, Hansen said, there will be net job losses created by the excessive wage hike. He noted automation is likely to increase with artificially high wages.

“With more expensive workers, for a given GDP, there are fewer workers,” Hansen said.

By 2035, NFIB’s research indicates Oklahoma would lose around 16,000 jobs if the minimum wage were set artificially high.

And those who retain jobs will often earn less than they would have otherwise because of reduced hours.

“Employers don’t just cut jobs completely,” Hansen said. “They shift full-time jobs to part-time.”

And, Hansen noted, some employers may have to cut health-insurance benefits to shift money to cover the new, artificially mandated higher wage.

Officials warned lawmakers that job losses would be disproportionately borne by rural citizens.

“When wages increase, so does everything else,” said Kinsey Westwood, senior public policy consultant with Oklahoma Farm Bureau. “It’s only going to continue to add to high inflation, reduce the number of jobs in rural Oklahoma, and result in poorer rural communities.”

“A statewide $15 floor would raise the wages above the local market rate in most rural counties, increasing the payroll costs by 10 to 20 percent for small employers that cannot be passed along,” said Amanda Hall, policy and research director for the State Chamber Research Foundation. “These rural counties would face proportionately higher impacts than urban areas, mainly because the market would not be able to sustain the increase.”

When worker hours are reduced to part-time, Hall noted average weekly pay declines even with a higher hourly wage.

James Leewright, a former state senator who now serves as president and CEO of the Oklahoma Restaurant Association, noted the state of California recently mandated a minimum wage of $20 an hour for fast-food workers in that state. The artificially high wage quickly cost workers thousands of jobs statewide, even as jobs increased in Oklahoma.

“They lost over 18,000 jobs shortly after that,” Leewright said. “In Oklahoma, we actually had some gains during that same period of time.”

Adjusted for cost-of-living differences, a $20-an-hour wage in California is comparable to a $14-per-hour wage in Oklahoma—less than the minimum wage that SQ 832 would impose in Oklahoma in 2029.

Leewright noted that 23 states that passed so-called “living wage” increases accounted for 93 percent of fast-food job losses during the time those wage changes were implemented.

State Rep. Mark Tedford, R-Tulsa, noted that “living wage” proponents often argue, essentially, that lower-paying jobs simply shouldn’t exist. He said that worldview is hostile to individuals who are seeking to improve their financial standing in life.

“It ignores the benefit of work,” Tedford said. “It robs these workers of the opportunity to build skills and the dignity of work itself.”