SQ 832: Vote no on the infinite minimum-wage escalator
In addition to a lengthy primary ballot, Oklahoma voters will decide on June 16, 2026, whether to approve or reject a permanent and annually escalating increase in the minimum wage in Oklahoma. Oklahomans should reject this job-killer that is being pushed by socialists and other economic ignoramuses.
As economist Thomas Sowell says, the real minimum wage is always zero. If the economic benefit of a job is less than a mandated minimum wage, that job simply won't exist. The passage of higher state and local minimum wages has led to an increase in automation and elimination of jobs that provide young people a first step into the job market. From Sowell's Basic Economics:
Making it illegal to pay less than a given amount does not make a worker's productivity worth that amount -- and if it is not, that worker is unlikely to be employed. Yet minimum wage laws are almost always discussed politically in terms of the benefits on workers who receive those wages. Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force.
Pay for entry-level jobs has already been on the rise, above the statutory minimum wage, as employers face a shrinking labor pool.
And an entry-level job is not meant to support a family. It's meant to be a place where you learn the basic habits needed to work with other people and for other people, and to begin to learn and improve skills so that your labor can become valuable enough to support a family.
Oklahomans should vote no but probably won't, because a lot of money has been and will be spent to put sob-stories on TV commercials. Raising the minimum wage sounds like the "nice" thing to do, as long as you don't think about the people who will spend more time with no job at all, because employers (particularly the many small businesses that give young people their first shot at a job) will have to cut costs to stay in business, and because many small businesses just won't make it. If you actually want to understand the harm SQ 832 will do, read OCPA's articles on the topic or visit their website dedicated to the issue, www.sq832killsjobs.com.
We don't have to guess about this effect. The State of Washington's youth labor participation rate dropped as its minimum wage was on the same kind of inflation-indexed escalator created by 832. A targeted increase for fast-food workers in California killed jobs in that industry and stressed related industries.
Now to the details you won't see in the ads or on the ballot. Here is what voting yes on SQ 832 means in legal terms.
SQ 832 is a statutory initiative petition. Because a statute can be amended without a vote of the people, the number of signatures required to qualify for the ballot is lower than for a constitutional amendment.
If SQ 832 passes, it will amend Oklahoma's existing minimum wage law, originally passed in 1965, 40 O.S. 197.1-197.17. Specifically, passage would amend section 197.2, which currently sets the Oklahoma minimum wage equal to the Federal minimum wage, and section 197.4, which defines who is and is not covered under the law. SQ 832 would also repeal 197.5. After the jump, you can see exactly what language will be added and what will be deleted.
You might wonder why Oklahoma has a minimum wage law at all, given the existence of a federal minimum wage. The federal minimum wage only applies to businesses engaged in interstate commerce, under the constitutional power to regulate interstate commerce, the definition of which has been stretched to include just about every possible activity. The Oklahoma law acts as a backstop, covering any business that is outside the Federal Government's vast reach. There is currently a provision exempting employers who are covered under federal law, so that there is no potential conflict; that provision would be eliminated under 832.
There are exemptions under the existing law, many of which would be eliminated under 832. If SQ 832 passes, farm workers and feed-store employees, domestic servants (e.g. nannies, housekeepers), paperboys, part-time employees (less than 25 hours per week), high school students under 18 and college students under 22 would no longer be exempt from the state minimum wage. Exemptions would remain for federal employees, volunteers for charitable, religious, and non-profit organizations, truck drivers (regulated by the Interstate Commerce Commission), reserve deputy sheriffs, anyone in an executive, managerial, or professional job, and outside salesmen. There will remain an existing exemption for businesses who have 10 or fewer full-time-equivalent employees at any one location and generate gross revenues of $100,000 or less, but that exemption level will not be indexed to inflation.
Under SQ 832 the Oklahoma minimum wage would immediately increase from $7.25 to $10.50 per hour, then to $12 in 2027, $13.50 in 2028, and $15 in 2029. From that point forward, it would be indexed to CPI-W, the Consumer Price Index for Urban Wage Earners and Clerical Workers, a measure that, according to the US Department of Labor, reflects the spending of about 30% of the US population.
The proponents could have chosen an inflation index that better reflects Oklahoma's economy. They chose the option that increases the fastest. A broader measure, CPI-U, reflects about 90% of the US population. Here's an article from 2014 explaining the distinction between CPI-W and CPI-U and why both measures are maintained. CPI-U is also calculated for Census Bureau regions. CPI-U for the West South Central region (Oklahoma, Texas, Arkansas, and Louisiana) has been tracked since 2017. Over the last 8 years, CPI-U West South Central has increased by 27.470%, while CPI-W has increased by 31.800%.
But any indexing strategy risks an inflationary doom loop: Increasing prices trigger increased wages which increase business costs which increase prices. There's no provision to stop the escalator in response to a local recession.
After the link, the changes to the law that will be enacted if 832 passes.
Here are the specific changes to section 197.2. Unmarked text is unchanged, new text is underlined, and deleted text is stricken through:
A. It shall be unlawful to employ workers in any industry or occupation within the State of Oklahoma under conditions of labor detrimental to their health or morals and it shall be unlawful to employ workers in any industry within the State of Oklahoma at wages which are not adequate for their maintenance.B. Except as otherwise provided in the Oklahoma Minimum Wage Act, no employer within the State of Oklahoma shall pay any employee a wage of less than:
the current federal minimum wage for all workers.(1) beginning January 1, 2025, $9 per hour for all hours worked;
(2) beginning January 1, 2026, $10.50 per hour for all hours worked;
(3) beginning January 1, 2027, $12 per hour for all hours worked;
(4) beginning January 1, 2028, $13.50 per hour for all hours worked; and
(5) beginning January 1, 2029, $15 per hour for all hours worked.C. Beginning January 1, 2030, and on January 1 of successive years, the minimum wage for all hours worked shall be increased by the increase in the cost of living, if any. The increase in the cost of living shall be measured by the annual percentage increase, as of August of the preceding year, in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW) or its successor index, as published by the U.S. Department of Labor or its successor agency, with the amount of minimum wage increase rounded to the nearest cent.
D. This Act shall be liberally construed in favor of its purposes and shall not limit any law, policy, standard, or regulation that requires payment of higher or supplemental wages or benefits to any employees or other working individuals. This Act shall not be construed to apply retroactively.
E. The provisions of this Act are severable and, if any part or provision hereof is void, invalid, or unconstitutional the decision of the court so holding shall not affect or impair any of the remaining parts or provisions hereof, and the remaining provisions hereof shall continue in full force and effect.
Here are the specific changes to section 197.4:
As used in this act:(a) "Commissioner" means the Commissioner of Labor;
(b) "Wage" means compensation due to an employee by reason of his employment, payable in legal tender of the United States or checks on banks convertible into cash on demand at full face value, subject to such deductions, charges or allowances as may be permitted by law;
(c) "Employ" includes to suffer or to permit to work;
(d) "Employer" means any individual, partnership, association, corporation, business trust, or any person or group of persons, hiring more than ten full-time employees or equivalent at anyone location or place of business; provided, however, if an employer has less than ten full-time employees or equivalent at anyone location or place of business but does a gross business of more than One Hundred Thousand Dollars ($100,000.00) annually, said employer shall not be exempt under the provisions ofthis act.
This act shall not apply to employers subject to the Fair Labor Standards Act of 1938, as amended, and who are paying the minimum wage under the provisions of said act, nor to employers whose employees are exempt under paragraph (e) of this section.(e) "Employee" includes any individual employed by an employer but shall not include:
(1) An individual employed on a farm, in the employ of any person, in connection with the cultivation of the soil, or in connection with raising or harvesting any agricultural commodity, including raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and furbearing animals and wildlife, or in the employ of the owner or tenant or other operator of a farm in connection with the operation, management, conservation, improvement or maintenance of such farm and its tools and equipment;
(2) Any individual employed in domestic service in or about a private home;
(3)(1) Any individual employed by the United States government;(2) Any individual employed by the State of Oklahoma;
(4)(3) Any individual working as a volunteer in a charitable, religious or other nonprofit organization;
(5) Any newspaper vendor or carrier;
(6)(4) Any employee of any carrier subject to regulation by Part I of the Interstate Commerce Act;
(7) Any employee of any employer who is subject to the provisions of any Federal Fair Labor Standards Act or to any Federal Wage and Hour Law now in effect or enacted hereafter; and who is paying the minimum wage under the provisions of this act;
(8)(5) Any employee employed in a bona fide executive, administrative or professional capacity, or in the capacity of outside salesman;
(9) Any person employed as part-time employee not on permanent status. A part-time employee is defined as an employee who is employed less than twenty-five (25) hours a week;
(10) Any person who is less than eighteen (18) years of age and is not a high school graduate or a graduate of a vocational training program, and any person who is less than twenty-two (22) years of age and who is a student regularly enrolled in a high school, college, university or vocational training program;
(11) Any individual employed in a feedstore operated primarily for the benefit and use of farmers and ranchers; or
(12)(6) Any individual working as a reserve force deputy sheriff.
And here is the text that would be deleted from section 197.5:
Every employer shall pay to each of his employees who have reached eighteen (18) years of age wages at a rate of not less than Two Dollars ($2.00) per hour. Regardless of other provisions of the Oklahoma Minimum Wage Act, every employee of the State of Oklahoma or any lessee or concessionaire thereof is hereby specifically covered by the Oklahoma Minimum Wage Act.
MORE:
Thomas Sowell discusses his intellectual journey out of Marxism, which began with his first encounter with minimum wage laws as a federal intern:
Audio of economists Walter Williams and Thomas Sowell discussing the harm to young people and disadvantaged minorities caused by minimum wage laws. Sowell: "The last year that black unemployment was lower than white unemployment was the year before the first minimum wage law... the Davis-Bacon Act." Williams adds that the Davis-Bacon Act was openly intended to protect white construction workers from competition from lower-priced black workers.
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