Things will be heating up this summer as Oklahoma voters head to the polls to decide State Question 832, a proposal to raise the state’s minimum wage to $15 an hour, an increase that would more than double the current $7.25 wage floor.
If voters are looking for clues about what that could mean for their state, they don’t have to look far. Neighboring Missouri offers a real-time example of the consequences of a similar $15 minimum wage hike.
Let’s rewind. Missouri voters first approved Proposition B in 2018, which increased the state’s minimum wage to $12 by 2023. Just a few years later, voters approved Proposition A, setting the state on a path to $15 by 2026.
Government data now shows that rapid escalation has had consequences for workers in the state. According to Bureau of Labor Statistics quarterly employment figures, restaurant employment in Missouri has declined both of the last two years, rising from $12.30 up to $15 per hour this year. In the last two years, Missouri has lost over 3,100 restaurant jobs.
Even before COVID took its toll on the industry, early signs of strain began in 2019, the first year after Proposition B’s wage hikes began, reversing what had been previously steady restaurant employment growth.
This decline isn’t just in Missouri. A broad body of economic research has consistently found that sharp minimum wage increases come with tradeoffs for workers, business, and local economies. In fact, roughly 80% of studies find that higher wage floors lead to job losses.
The reason is straightforward. When labor costs rise sharply, especially in low-margin industries like restaurants, they often respond by limiting overtime and shift pick up opportunities, cutting benefits, and cutting back hours for existing employees.
In some cases, the consequences are even more severe. A Harvard Business School study of San Francisco restaurants found that every $1 increase in the minimum wage raised the likelihood of a median-rated restaurant closing by 14%.
Research modeling similar policies suggests Oklahoma could see comparable effects. Economists from Miami and Trinity University estimate that a $15 wage could reduce restaurant employment by roughly 12,300 jobs statewide, while also leading to broader earnings losses across the economy. Additional research published in the National Bureau of Economic Research shows past wage hikes up to $15 per hour slashed hundreds of thousands of jobs nationally for teens and entry-level workers, who make up a large share of minimum wage positions.
Oklahoma voters will ultimately decide whether the tradeoffs are worth it. But as June approaches, Missouri’s experience serves as a nearby reminder that large, rapid wage hikes don’t happen in a vacuum, and the consequences can arrive faster than many expect.