By Rob Moore, Principal at Scioto Analysis
The federal minimum wage has been fixed at $7.25 an hour since 2009 despite the cost of everything going up. State Question 832 will change this for Oklahomans by increasing the minimum wage gradually to $15 an hour, then fixing future wages commonly used index that measures the increases of the cost of living. .
HOW STATE QUESTION 832 WORKS
State Question 832, placed on the ballot through an initiative petition from the people of Oklahoma, will gradually raise Oklahoma’s minimum wage to $15 an hour by 2029. That means minimum wage workers in Oklahoma can expect about $100 more a week, roughly $4,200 more a year, in their paychecks when the wage change is fully implemented. Currently around 350,000 Oklahomans are working in low-wage jobs that would be impacted by the passage of State Question 832. More than 200,000 Oklahoma children live in households with parents who would get a raise. After 2029, the wage adjusts each year based on the cost of living, so a paycheck keeps up with the cost of groceries, gas, and rent.
Instead of leaving politicians (who haven’t raised the minimum wage in nearly 2 decades) in charge of ensuring pay keeps up with rising costs, Oklahoma citizens now have the power to take the decision out of politicians’ hands: SQ 832 means if costs go up further, pay will keep up.
HOW INFLATION IS CALCULATED
State Question 832 uses the Consumer Price Index for Urban Wage Earners: CPI-W. This is a national average compiled by the U.S. Bureau of Labor Statistics. The Bureau of Labor Statistics samples 75 urban areas across the country to calculate the Consumer Price Index. These areas are stratified across all four census regions and all nine census divisions, and together they cover about 93% of the U.S. population. Oklahoma City is one of the 75 cities used to calculate the CPI-W. Specifically, it includes Canadian, Cleveland, Grady, Lincoln, Logan, McClain, and Oklahoma Counties.
The CPI-W is the same index used to set cost-of-living adjustments for:
- Social Security recipients
- Military retirees
- Federal civil service retirees
THE MATH, YEAR BY YEAR
Over the last ten years, CPI-W has averaged 3.15% a year. In most years it ran around 2% or less. The largest increases came during the 2021–2022 inflation spike.
| Year | CPI-W Change | Year | CPI-W Change |
|---|---|---|---|
| 2016 | 1.0% | 2021 | 5.3% |
| 2017 | 2.1% | 2022 | 8.5% |
| 2018 | 2.5% | 2023 | 3.8% |
| 2019 | 1.7% | 2024 | 2.9% |
| 2020 | 1.2% | 2025 | 2.5% |
| 10-Year Average | 3.15% | ||
LOOKING AHEAD
Here’s what CPI-W could theoretically do to a worker’s paycheck. Applying the last ten years of real CPI-W rates to a $15 starting wage, here’s what the next decade could look like year by year:
| Year | CPI-W | Hourly wage | That year’s raise |
|---|---|---|---|
| 2029 | — | $15.00 | Starting wage |
| 2030 | 1.0% | $15.15 | +$0.15/hr |
| 2031 | 2.1% | $15.47 | +$0.32/hr |
| 2032 | 2.5% | $15.85 | +$0.39/hr |
| 2033 | 1.7% | $16.12 | +$0.27/hr |
| 2034 | 1.2% | $16.32 | +$0.19/hr |
| 2035 | 5.3% | $17.18 | +$0.86/hr |
| 2036 | 8.5% | $18.64 | +$1.46/hr |
| 2037 | 3.8% | $19.35 | +$0.71/hr |
| 2038 | 2.9% | $19.91 | +$0.56/hr |
| 2039 | 2.5% | $20.41 | +$0.50/hr |
| 10-yr avg: 3.15% | Typical raise: about $0.30–$0.50/hr | ||
This assumes inflation stays elevated over the next ten years and that the Federal Reserve is unable to decrease inflation to its 2% long-term inflation goal. If the Federal Reserve is successful in reducing inflation, these rates will be even lower.
ALARMIST ANALYSIS
Some opponents of State Question 832 have argued the question would lead to a $35 minimum wage in the next ten years. As you can see above, this is unlikely. The CPI-W would need to hit nearly a 8.9% average–nearly three times as high as the elevated recent trend–to increase a 2029 $15 minimum wage to $35 by 2039. Inflation has not hit this level on a one-year basis since 1981 and the United States has never experienced a ten-year stretch at an average of 9% inflation. Suffice it to say that if the United States experiences an inflation rate of 9% for a decade that the wages of low-income workers will be among the least of its concerns.
FINAL THOUGHTS
State Question 832 demonstrates the best practices in minimum wage design: setting rates high enough to lift worker wages to a rate that reflects market conditions, phasing in over time to reduce potential wage shocks, and tying to inflation to reflect future changes in cost of living. Claims to the contrary are misinformed at best.
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About Rob Moore:
Rob Moore is the principal for Scioto Analysis. Rob has worked as an analyst in the public and nonprofit sectors and has analyzed diverse issue areas such as economic development, environment, education, and public health. His specialty is applied microeconomic analysis of public policies and tradeoffs between efficiency and equity outcomes in economic development and social safety net programs.
Before becoming an analyst, Rob was a community organizer in Omaha, Nebraska. He holds a Master of Public Policy from the University of California Berkeley’s Goldman School of Public Policy and a Bachelor of Arts in Philosophy from Denison University.
