If State Question 832 becomes law, the minimum wage in Oklahoma will more than double to $15 an hour by 2029 and then continue rising based on increases in the cost-of-living in the nation’s largest urban centers, as measured by the U.S. Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The pro-SQ 832 campaign claims that will make certain the minimum wage “adjusts to the cost of living so working people’s pay keeps up with rising costs.”

But the data show SQ 832 would escalate the wage mandate significantly faster than actual inflation in Oklahoma: the CPI-W has increased by up to 80 percent more than Oklahoma’s annual inflation rate. That will put state businesses under increased pressure to either cut jobs or increase prices far more aggressively than would otherwise occur.

That’s because the U.S. Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers would effectively tie Oklahoma’s wage mandate to the cost-of-living in places like New York City or San Francisco, where the cost-of-living far exceeds Oklahoma norms, particularly in rural communities.

While SQ 832 would initially mandate that entry-level jobs pay $15 an hour in 2029, an analysis by The State Chamber of Oklahoma and Oklahoma Farm Bureau found SQ 832 would put Oklahoma’s minimum wage on a fast track to $35.61 per hour and continue rising thereafter.

In addition, SQ 832 eliminates minimum-wage exemptions that have been in place for decades for farms and ranches, part-time employment, and teenage employment, meaning even the smallest businesses would be hit by the mandate. And the wage mandate applies to nearly all businesses, regardless of size.

In a June 1 column, Luke Reynolds, the public affairs director for the State Chamber of Oklahoma, noted that in recent years the CPI-W has surged far above the rate of inflation in Oklahoma.

In 2022, the increase in the national CPI-W was 60 percent greater than the inflation increase in Oklahoma.

In 2024, the CPI-W outpaced Oklahoma inflation by 80 percent.

“Yet SQ 832 would make that national number the driver of Oklahoma wage policy,” Reynolds noted.

In practice, tying Oklahoma’s minimum-wage mandate to the CPI-W would cause businesses’ labor costs to surge far faster than state inflation. The only way to prevent those costs from devouring all profit would be to increase prices, as Jerrod Shouse, the Oklahoma state director for NFIB, noted in a May 28 interview on “Weighing In,” a podcast produced by the Oklahoma Council of Public Affairs and OCPA Action.

“When I am the small business owner and I have to pay my employees more, how do I make up for that?” Shouse said. “I have to raise the price of the products or goods that I sell.”

The Economic Policy Institute, which supports SQ 832, put out a report in March that estimated the increased labor expenses created by the proposal will total more than $783 million annually at the $15-an-hour rate, with additional increases imposed on employers each subsequent year.

That $783 million increase will be passed on to Oklahoma consumers, and the scope of pass-along costs will increase each year under SQ 832.

David Bahnsen, chief investment officer of The Bahnsen Group, noted in a May interview on the Oklahoma Council of Public Affairs’ “Thinkin’ on Lincoln” podcast that SQ 832 will quickly eat away at the low cost of living in Oklahoma.

“If you inflate wages and then that leads to an inflation of prices, what we call that is ‘more inflation,’” Bahnsen said.

When the Employment Policies Institute commissioned a survey of 166 American economists in March and April, it found that 59 percent of economists believe a $15 an hour minimum wage will increase consumers’ cost of living. If the minimum wage is boosted above $20 an hour, as SQ 832 would force in the future, 84 percent of economists believe surging costs are likely—with 42 percent predicting an above-$20 wage mandate will increase consumer costs “significantly.”

Many economists who identified as Democrats agreed. The survey found 76 percent of Democratic economists believe a wage of more than $20 an hour will inflate normal living expenses for citizens.

However, higher prices can drive away customers so, at some point, experts agree that many businesses will be forced to cut expenses rather than increase prices further. The quickest way to achieve that goal will be to reduce the number of employees, cut worker hours, and/or reduce worker benefits.

That was the case in Seattle when local officials mandated that the minimum wage be increased from $9.47 to $13 an hour by 2016.

According to a National Bureau of Economic Research analysis, the wage hike “reduced hours worked in low-wage jobs by 6-7 percent.” As a result, those low-wage workers experienced an actual decline in earnings even as their hourly wage increased.

A forecast by the NFIB Research Center found that SQ 832 would cause Oklahoma to lose up to 16,000 jobs and lead to a loss of $700 million in economic output by 2035. Sixty percent of job losses would occur at small businesses. More than one in four job losses would occur at businesses with fewer than 20 employees.