Economy

Would SQ 832 cost consumers more than the grocery tax repeal saved?

June 2, 2026

Ray Carter

In 2024, state lawmakers voted to repeal the state sales tax on groceries, boasting that it would save Oklahomans around $418 million per year.

But State Question 832, which would initially raise Oklahoma’s minimum wage from $7.25 to $15 an hour, would completely negate those savings, nearly twice over, according to a recent study put out by proponents of SQ 832.

Under SQ 832, the minimum wage in Oklahoma will more than double from $7.25 an hour to $15 an hour by 2029, and then continue rising every year thereafter 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. That would effectively tie Oklahoma’s wage mandate to the cost of living in places like New York City or San Francisco.

As a result, 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.

Experts have long noted that the increased labor costs created by SQ 832 could force many employers, particularly small businesses, to reduce employee numbers, cut hours for workers, and/or reduce benefits to offset increased costs.

SQ 832 proponents have dismissed those concerns and routinely put out data that assumes no loss of jobs or hours. But if that happens, the only way for employers to cover the additional costs is to raise prices for goods and services.

“The higher wages are going to be paid by the customers of the business,” 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. “And that is a permanent law of economics that can’t be repealed.”

The cumulative impact of those price hikes could be substantial even at the initial $15-an-hour rate, and will only increase each year thereafter as the wage mandate continues to rise.

The left-wing Economic Policy Institute, which supports SQ 832, put out a report in March that estimated the increased labor expenses created by SQ 832 will be more than $783 million overall at the $15-an-hour rate. That estimate includes not only those currently working for minimum wage, but also thousands of people who currently receive more than minimum wage who are expected to see their hourly rates increase in tandem with the bottom rate.

If SQ 832 does not result in the elimination of jobs or increased automation, and the added cost is shifted entirely to customers, it would be equivalent to re-instituting a sales tax rate of 8.2-percent on all grocery purchases in Oklahoma.

A broad range of economists agree that SQ 832 will result in cost-shifting to consumers, although some businesses will combine higher prices with reduced hiring, increased automation, or cuts to working hours and employee benefits to offset the rising business costs created by SQ 832.

When the Employment Policies Institute commissioned a survey of 166 American economists in March and April, the survey found that 59 percent 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 soon require, 84 percent of economists believe surging costs are likely—with 42 percent predicting an above-$20 wage mandate will increase consumer costs “significantly.”

In California, which already has an SQ 832-style wage law in place, the annual cost of groceries is $6,586 annually, compared to $5,793 for the same products in Oklahoma today.