What’s up this week at Oklahoma Policy Institute? The Weekly Wonk shares our most recent publications and other resources to help you stay informed about Oklahoma. Numbers of the Day and Policy Notes are from our daily news briefing, In The Know. Click here to subscribe to In The Know.
This Week from OK Policy
Housing is unaffordable for Oklahoma’s low-wage workers: Oklahomans working a full-time job should be able to provide basic needs for themselves and their families, but 2 in 5 Oklahomans are unable to afford a stable home working one full-time job. The combination of rising housing costs and stagnant wages is keeping too many Oklahomans from being able to secure safe and stable housing for their families. To address this affordable housing crisis policymakers must find solutions that close the gap between housing costs and wages. [Sabine Brown / OK Policy]
A look at leadership in the state House and Senate (Capitol Update): The House and Senate went into session for “organizational day” last week and the leadership teams in each chamber were formally elected. There wasn’t a lot of change in either chamber. [Steve Lewis / Capitol Update]
Policy Matters: Tax incentives can bring short-term gains, long-term pains: Tax incentives are used as part of economic development by governments to provide tax exemptions, deductions, or credits in exchange for expected future spending. But a closer look shows that some economic development incentives realize only limited short-term gains that can be outweighed by long-term negative consequences. [Shiloh Kantz / The Journal Record]
Together Oklahoma: Pontotoc County Community Meeting, Tuesday, Jan. 17: Join us for a discussion about criminal justice in Oklahoma. Share your thoughts and learn about resources and advocacy in your community. Location: East Central University, Chickasaw Business and Conference Center, 830 E Main Street in Ada. [Learn more]
Weekly What’s That
The minimum wage is the lowest wage per hour that may be paid by law to most employees in most jobs. The U.S. federal government first adopted a national minimum wage in 1938 as part of the Fair Labor Standards Act, and it has been raised by Congress over twenty times since then.
The federal minimum wage was set as $7.25 per hour effective July 2009. As of 2022, the federal minimum wage has remained unchanged for over 13 years, the longest period ever without an increase. During this period, the minimum wage has lost over 27 percent of its value when adjusted for inflation, and some 40 percent of its value compared to its peak in 1968.
As of 2022, Oklahoma is one of 20 states that has a minimum wage set at the federal minimum wage of $7.25 per hour. Meanwhile, 30 states and D.C. have set a higher minimum, of which 20, including four of Oklahoma’s neighbors (Arkansas, Missouri, New Mexico and Colorado), are higher than $10 per hour. In addition, 46 cities have set a local minimum wage higher than their state minimum. However, the Oklahoma Legislature in 2014 passed a preemption law prohibiting municipalities from setting their own minimum wage.
Some employees may be paid less than the minimum wage, also known as the subminimum wage. For example, an employer in Oklahoma may pay a tipped employee as little as $2.13 an hour in direct wages if that amount plus the tips received equal at least the federal minimum wage, the employee retains all tips, and the employee customarily and regularly receives more than $30 a month in tips. Employers may also gain authorization to pay subminimum wages to workers who have disabilities for the work being performed. Certain young workers and full-time student workers may also be paid less than the standard minimum wage.
Quote of the Week
“Even for full-time workers, wages are insufficient to afford housing for Oklahoma’s low-wage earners. More than 1 in 5 Oklahomans working a single, full-time job cannot afford a modest one-bedroom rental at fair market rent, while 2 in 5 cannot afford a two-bedroom rental.”
– Sabine Brown, OK Policy’s Infrastructure and Access Senior Policy Analyst, speaking on the current state of the affordable housing crisis. [Sabine Brown / OK Policy]
Editorial of the Week
Editorial: Don’t fall for distractions from State Superintendent Ryan Walters
Oklahoma State Superintendent Ryan Walters wasted no time in throwing out the first red herring of his governance by saying his No. 1 priority is getting rid of “liberal indoctrination” and resumed his car videos with a pledge to revoke licenses of two teachers with whom he has a political disagreement.
This is a distraction playing to a fringe with no base in reality. It’s a sleight-of-hand trick to draw attention from other things. Don’t fall for it.
Anyone with knowledge of Oklahoma’s current state of public education knows the biggest challenges are in the workforce, resources and youth mental health.
Numbers of the Day
- 73 – Number of hours a person working minimum wage needs to work each week to afford a one-bedroom rental at fair market rent. [National Low Income Housing Coalition]
- 17 in 30 – On average, 17 of the 30 most common professions in Oklahoma — including teacher assistants, home health aides, and customer service representatives — pay less than the $16.61 per hour needed to afford a two-bedroom rental home. [National Low Income Housing Coalition]
- 2009 – Minimum wage in Oklahoma was last increased when the federal rate was increased in July 2009. [U.S. Department of Labor]
- $4.4 billion – Amount of targeted tax expenditures made available to Oklahoma businesses and organizations in 2018. This was up from $500 million in 2010. [A Better Path Forward / OK Policy] | [Oklahoma Tax Commission Tax Expenditure Report, 2021-22]
- 26.4% – Rent increased 26.4 percent in Oklahoma City between March 2020 and December 2022. In Tulsa, that increase was 24.4 percent for the same time period. [Apartment List]
What We’re Reading
- Rents Are Out of Reach for Minimum-Wage Workers Toiling 40 Hours a Week: Affordable housing is becoming more and more precarious as rents keep climbing at a record pace, and wages for many Americans aren’t keeping up with inflation. The average worker on a 40-hour week would need to earn $21.25 an hour to afford a one-bedroom home in the US, and $25.82 to afford a two-bedroom home. [Bloomberg News]
- Americans Want More Affordable Housing — Just Not Nearby: Generally, Americans support tackling housing insecurity, with 71 percent saying that it should be at least an important priority for Congress to pass legislation growing the housing supply and improving housing affordability. But research also suggests that while Americans want more kinds of infrastructure to reduce homelessness, far fewer want those resources close to where they themselves live. [FiveThirtyEight]
- 23 states and D.C. saw minimum wage hikes ranging from $0.23 to $1.50 an hour: On January 1, 23 states and Washington, D.C. increased their minimum wages, raising pay for an estimated 8.4 million workers across the country. In total, workers’ wages will increase by more than $5 billion, with average annual raises for affected full-time workers ranging from $150 in Michigan to $937 in Delaware. In addition, 27 cities and counties increased their minimum wages on January 1, adding to the number of workers likely to see increased earnings. [Economic Policy Institute]
- Evaluations Can Help Policymakers Balance Risk and Reward of Tax Incentives: Pew’s research has found that policy improvements are more likely when states have a formal process for lawmakers to consider the analysis and recommendations of an evaluation. Many state evaluation laws explicitly detail who must review the findings and recommendations included in tax incentive evaluations. One approach is to assign an oversight committee or commission to study and translate those results into policy recommendations, as is done in Colorado and Oklahoma. [Pew Trusts]
- Eighty Percent of Homes on the Market Aren’t Affordable for Households Earning Median Incomes or Less: Home prices have risen substantially above the inflation rate, putting homeownership increasingly out of reach for many Americans. Rising interest rates have slowed home price growth but have introduced a new barrier to affordability. As a result, households earning median incomes or less can afford only 20 percent of homes for sale, compared with the roughly half of homes they could afford in 2016. But affordability varies noticeably across locations, suggesting that a combination of federal and local solutions that target both supply and demand could alleviate cost burdens. [Urban Institute]
- From OK Policy: Housing is unaffordable for Oklahoma’s low-wage workers