OKLAHOMA CITY (OBV) — Oklahoma business and economic leaders warned that State Question 832 could increase costs for employers, reduce entry-level opportunities and create new pressure on small businesses during a recent Greater Oklahoma City Chamber panel discussion.
The panel was moderated by Mike Jackson, senior vice president of government relations and policy for the Greater Oklahoma City Chamber. Panelists included Russell Evans, Ph.D., dean of the University of Central Oklahoma College of Business; Adam Maxey, vice president of government affairs for The State Chamber of Oklahoma; and James Leewright, president and CEO of the Oklahoma Restaurant Association.
SQ 832 will appear on the June 16 ballot. The measure would raise Oklahoma’s minimum wage to $15 per hour by 2029 and then tie future increases to CPI-W, a federal inflation index.
Evans said the current federal minimum wage is not a major binding factor in Oklahoma’s labor market because relatively few workers earn that wage today. He said the larger question is what happens when the state creates a binding wage floor and then automatically increases it over time.
Evans said SQ 832 would change the cost of entry-level labor, which could affect how employers make staffing, pricing and automation decisions over time.
“As those minimum wage increases over time, cost considerations become more acute, and you would expect to see bigger impacts inside affected industries,” Evans said.
Evans also said the automatic escalator could create added pressure during downturns because the wage floor would continue rising even when the labor market is weakening.
Leewright said Oklahoma restaurants are already operating under significant pressure. He said national profit margins for full-service restaurants have fallen from about 5% to 2.8%.
“It just takes one mistake or one big piece of equipment going out to have a month, or several months, where you’re losing money,” Leewright said.
Leewright said restaurants have faced rising food, labor, insurance and operating costs over the past several years, while many operators have been unable to pass all of those costs on to customers.
He said restaurants have absorbed much of that pressure because raising prices too much can reduce customer traffic.
Leewright said rural restaurants could face especially difficult choices because they often have smaller labor pools and operate some shifts at a loss in order to stay open and keep employees.
“They just don’t have the resources to bounce back from one single mistake or one breakdown from equipment,” Leewright said.
Maxey said policymakers should be careful not to undermine Oklahoma’s competitive advantages, including affordability, by using government mandates to shape the economy in ways that could distort market outcomes.
Maxey also raised concerns about Oklahoma’s competitiveness with surrounding states if SQ 832 passes.
“When labor is less expensive across the Red River or in another bordering state, that becomes an input a business has to consider,” Maxey said.
The panelists also discussed automation. Evans said businesses compare the cost of labor with the cost of technology, and as labor becomes more expensive while technology becomes cheaper, employers may turn to self-checkout, kiosks, and other automated options.
“As labor prices go up and technology prices come down, the cost consideration shifts toward a technological solution,” Evans said.
Maxey said automation could affect the same entry-level opportunities many workers use to build basic workplace skills.
“The entry-level opportunities that are lost are really detrimental to the growth of the workforce,” Maxey said.
Maxey also pointed to exemptions that would be removed under SQ 832, including exemptions affecting agriculture, part-time workers, student workers, and public employers.
He said the loss of the agriculture exemption would place new pressure on an industry that often works within narrow seasonal windows and tight margins.
“Applying this rigid structure, based on calculations in urban areas, just does not fit ag operations in Oklahoma,” Maxey said.
Maxey also said the measure could create new pressure on local governments because cities, counties, and school districts are not exempt. Those public employers could face higher costs under SQ 832 and may eventually need to generate additional revenue to cover them, he said.
When asked about better approaches to improving economic mobility, Maxey said the issue should be debated by lawmakers over time with input from rural communities, urban communities, employers, and workers. He said Oklahoma should focus on skills, workforce development, and education.
Maxey said the better conversation is about “the skills people need to raise themselves out of poverty, to better themselves, to make a career, to build a business.”
Evans said policymakers should look for ways to reduce barriers to labor force participation, including child care support, and reduce barriers to entrepreneurship.
“If you’re really thinking about how to create upward mobility for Oklahoma, I’d start with how we improve that alignment between the worker, the education institution, and the employer,” Evans said.
