A ballot measure going before Oklahoma voters calls for imposing a dramatic increase in the state’s mandatory minimum wage with continued, rapid escalation based on the cost of living in urban centers in states like California and New York.

State Sen. Kristen Thompson, whose family operates two restaurants, warns the real-world impact of that proposal will not align with pie-in-the-sky promises made by advocates of the California-style wage plan.

“You can look at California and see exactly what happened to the restaurant industry out there,” said Thompson, R-Edmond. “This is essentially the kiss of death for independent restaurant ownership.”

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.

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 have to earn $59,740 in California and $57,337 in New York to enjoy the same standard of living.

As a result, SQ 832 would mandate that entry-level jobs pay at least $15 an hour by 2029 and then rapidly escalate the wage even higher. An analysis by The State Chamber of Oklahoma and Oklahoma Farm Bureau found SQ 832 could inflate Oklahoma’s minimum wage to $35.61 per hour within 15 years.

Thompson noted most hourly workers in Oklahoma already make well above the state’s official minimum wage of $7.25. The problem is that SQ 832 would cause the minimum wage to surge far above market levels, leading to layoffs, reduced worker hours, and automation in many businesses. In the restaurant industry, she says, a dramatically inflated wage mandate would deter many families from opening an eatery in the first place.

“The reality, especially with that escalator with the CPI, it’s just going to be devastating,” Thompson said. “You’re seeing, already, the big chains automating everything under the sun to cut costs.”

Research Shows Employment Effects

SQ 832 is similar to a law enacted in California that dramatically increased the minimum wage for fast-food employees to $20 an hour in April 2024. The results of that wage hike were devastating for many workers who soon found themselves without jobs, working fewer hours, and/or being replaced by machines.

A paper published by the National Bureau of Economic Research found that employment in California's fast-food sector declined by 2.7 percent relative to employment in the fast-food sector elsewhere in the United States from September 2023 through September 2024. Adjusting for trends prior to the law’s enactment, the authors found there had been a decline of 3.2 percent. The median estimate translated into a loss of 18,000 jobs in California’s fast-food sector.

Researchers noted that California’s fast-food jobs declined even as industry jobs increased nationwide.

Similarly, in November 2024, the Employment Policies Institute found the California wage law had reduced fast-food job opportunities and also hit customers’ pocketbooks. Menu prices surged as much as 10.1 percent from the law’s 2023 passage to April 2024.

And a February 2025 paper from the Berkeley Research Group noted that a survey of restaurant operators showed that nearly 89 percent reduced employee hours to help offset increased costs. The survey also found that 35 percent of operators reduced supplemental employee benefits to offset the higher costs created by the wage law.

The Berkeley Research Group also found that menu prices at California’s fast-food restaurants increased by 14.5 percent between September 2023 (the month the wage legislation was signed into law) and October 2024, which was nearly double the national average during that time.

“California fast food restaurants also increased automation and technology adoption to offset rising labor costs,” the Berkeley Research Group paper stated. “Therefore it should not be surprising that the number of employees per restaurant is declining.”

At an October study conducted by members of the Oklahoma House of Representatives, James Leewright, president and CEO of the Oklahoma Restaurant Association, noted that adjusted for cost-of-living differences, a $20-an-hour wage in California was comparable to a $14-per-hour wage in Oklahoma—less than the minimum wage that SQ 832 would impose in Oklahoma.

Thompson, like many other small-business owners, says there is no reason to think the bad outcomes generated by California’s wage law won’t occur in Oklahoma if the same wage policy is imposed here.

“We have the playbook from California,” Thompson said. “We know what happened to the restaurant industry out there after they passed this policy out there.”

During House lawmakers’ October study, Peter Hansen, director of research and policy analysis at the National Federation of Independent Business (NFIB), warned that the impact of an artificially high wage law would reduce state GDP by roughly $700 million by 2035 compared to what would happen if no change were made to the state’s minimum-wage law.

He also warned that net job losses were likely in Oklahoma by 2031 and 16,000 jobs could be lost by 2035 if the state’s minimum-wage law is increased dramatically.

Amanda Hall, policy and research director for the State Chamber Research Foundation, warned that a $15-an-hour minimum wage would be especially devastating for rural communities, since it would hike payroll costs by 10 to 20 percent.

Tying Oklahoma’s wage law to California’s cost of living will not only create economic harm across the state but also change the trajectory of many working families for the worse, Thompson noted.

“These family restaurants that have been around forever, they’re passed down from generation to generation, and it’s part of who these people are, their family legacy,” Thompson said. “If something like this were to pass, how many of them would we lose?”