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Members of the Oklahoma Legislature,
We are writing to inform you of a challenge filed Monday by The State Chamber in the Oklahoma Supreme Court against proposed State Question 832, which would mandate an automatic annual increase to the minimum wage in Oklahoma with zero input from you, the duly elected legislature of Oklahoma.
The policy contained in SQ 832 is a bad approach to economics, and the process by which it would become law is an even worse approach to legislating.
We also believe it is unconstitutional. Specifically, SQ 832 seeks to circumvent the Legislature by empowering federal bureaucrats to create automatic wage increases in Oklahoma. After more than doubling Oklahoma’s minimum wage as just a first step, SQ 832 then imposes an automatic, open-ended annual increase that would happen every year without a vote by the Legislature. Worse, to accomplish this end-around the Legislature, SQ 832 would delegate authority to federal bureaucrats in the U.S. Department of Labor to set the level of the mandate.
There is no upper limit to this wage hike, annually ratcheting up the squeeze on Oklahoma businesses based on inflation estimates announced by federal bureaucrats and tied to price increases in large urban areas that bear little resemblance to the cost of living in Oklahoma. As if that isn’t enough, by using the initiative petition process, the proponents of SQ 832, however pure their motivations, have cut the Legislature completely out of the policymaking process regarding what would be one of the most significant disruptions of Oklahoma’s private sector in recent memory.
We find this unacceptable.
That’s why, alongside our friends at Oklahoma Farm Bureau, we filed a lawsuit in the Oklahoma Supreme Court yesterday challenging SQ 832’s constitutionality, and that’s why, if necessary, we will lead a coalition of Oklahoma business leaders and like-minded groups who are concerned about the threat SQ 832 poses to Oklahoma’s business climate to defeat the measure at the ballot box. Concerned leaders from across Oklahoma have quickly rallied to join our coalition opposing SQ 832, and we look forward to sharing their stories and concerns with you in the future.
For now, given that SQ 832’s extreme wage hike—doubling the minimum wage, just as a first step—has not been under consideration at the Capitol where it can receive your deliberation and debate, we think it appropriate to provide you the business community’s initial analysis of what this sea change in Oklahoma labor regulation would mean for our economy, our state, and its citizens.
First, SQ 832 is a solution in search of a problem. Oklahoma businesses statewide have “Help Wanted” signs in their windows as they fiercely compete with one another for employees. The fact of the matter is that Oklahoma businesses already pay strong, fair wages well above the current minimum wage hourly rate for the overwhelming majority of their employees. State Chamber member companies have no interest in artificially holding down wages, and in today’s labor market, they could not stay in business if they tried to do so. For this reason, raising the minimum wage would not directly increase the pay of most employees. But for certain categories of workers—often part-time employees or in their first job trying to break into the workforce—the result of this policy will be fewer jobs available, not to mention higher prices at the gas pump and the grocery check-out.
Second, SQ 832’s wage hike has no upper limit. After the initial doubling of the current minimum wage, the proposal would implement an Inflation Escalator that would automatically raise the wage mandate every year without action by the Legislature. There is no cap. To illustrate the spiral SQ 832’s Inflation Escalator could impose on Oklahoma families and businesses, the following projections are helpful. Within a decade and a half of taking effect, the Inflation Escalator in SQ 832 would take the government-mandated wage from today’s $7.25 per hour to:
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