Paraprofessionals—who work under the supervision of licensed teachers to provide focused instructional and behavioral support to students—provide crucial services and play a critical role in educating students with disabilities. Research has demonstrated that paraprofessional educators are key contributors to effective schools.

Despite this, the current pay of paraprofessionals is too low, and clear labor shortages of paraprofessionals have developed in public schools around the country—including in New York City. Paraprofessionals working for the New York City Department of Education have annual earnings ranging from $33,000 to $54,000. EPI’s Family Budget Calculator shows that a single adult with no children in New York City needs to earn $83,262 to afford a modest but adequate standard of living. An additional $10,000 would move those salaries closer to—but still well short of—a living wage. 

One clear sign that the city could benefit from greater public investment in paraprofessionals is the fact that New York City now spends more than $1.5 billion each year on special education due process cases. These costs arise when families successfully demonstrate that the public school system has failed to provide the services required under federal law, requiring the city to cover the cost of remedies such as private school enrollment (the most well-known subset of these are often referred to as “Carter cases”).

Boosting pay by $10,000 for the roughly 25,000 full-time paraprofessionals is estimated to cost the city about $244 million in 2027, roughly 15% of what the city spends on special education due process cases. While no single policy will eliminate these due process case costs, investing in the workforce that delivers crucial special education services can certainly strengthen recruitment and retention and increase the share of families of children with disabilities who are satisfied with the quality of education and support that is being provided in public schools. In turn, more families of special education students choosing to remain in public schools will reduce expenditures on due process cases, helping defray the cost of paying paraprofessionals closer to a living wage.

Finally, we should note that while the state and city of New York would benefit greatly from increased investment in the public sector, this investment obviously requires revenue. This revenue should come from those most able to provide it: high-income households and rich corporations. The quality of services provided to the city and state will depend crucially on whether or not policymakers are willing to raise the revenue needed to make these investments.

After years of pushing unsuccessfully to weaken work hours protections for 14–15-year-olds in Ohio, industry groups have partially succeeded with the help of State Senator Tim Schaffer. Just months after a public outcry led Governor Mike DeWine to veto similar child labor rollbacks in 2025, Schaffer revived the attack on child labor laws by sneaking an amendment into a broader bipartisan education bill. An unrelated amendment tacked onto the new law will allow employers to schedule 14–15-year-olds until 9 p.m. during the school year, though (unlike prior versions of the legislation) only on nights not preceding a school day. The change puts Ohio state law in conflict with long-standing federal child labor standards and allows employers to treat young teens more like adults for scheduling purposes, while saving on labor costs. In Ohio, employers can pay youth under 16 the federal minimum wage of $7.25, nearly $4 less than the regular state minimum wage of $11 an hour.

Industry-supported Ohio senator snuck failed child labor rollback into bipartisan bill to force lawmakers’ support

In late 2025, Governor DeWine vetoed a standalone bill that would have extended the number of hours that employers can schedule 14–15-year-olds to work on any night during the school year—in violation of federal law—after advocates from a long list of child health and welfare, education, organized labor, and economic justice organizations publicly urged him to oppose it. In his veto message, DeWine acknowledged that existing work hour guidelines—providing young teens (under 16) opportunities to gain work experience “after school up to 7 p.m.”—have been “in place, across this country, for many years” and have “served us well” and “effectively balanced the importance of 14- and 15-year-old children learning to work, with the importance of them having time to study.”

But DeWine has now approved similar changes as part of a comprehensive, bipartisan education bill that received broad support, including from education and child advocates. State Senator Schaffer’s 11th-hour backdoor move to add previously vetoed child labor legislation to this year’s education bill was a desperate effort to force changes that have otherwise failed to pass muster, even in a Republican-controlled state legislature.

Federal child labor laws reflect decades of research about the harms of overwork

Allowing young teens to work more hours at night opens the door to problems ranging from poor academic outcomes to a greater chance of injury. Studies have consistently shown that intensive work at a young age is associated with poor academic outcomes; longer hours raise the risk of work-related illness and injury; and working later into the night exacerbates sleep deprivation that in turn can interfere with teens’ education and well-being. Allowing employers to schedule young teens to work until 9 p.m. also increases the likelihood of nighttime driving for new drivers (minors can be permitted to drive at age 15.5 in Ohio), an additional risk factor for accidents. Motor vehicle crashes are already the leading cause of death for teens and young adults, who are three times more likely than adults to die in a car accident.

For all these reasons, federal law limits the maximum number of working hours for young teens to three hours per night or 18 hours a week and prohibits work past 7 p.m. during the school year. Because states can legislate above FLSA standards but not below, the new state standards conflict directly with federal law.

The enacted rollback is less harmful than last year’s failed bill but still hurts children and violates federal law

While the bill DeWine vetoed in 2025 would have allowed employers to schedule 14-year-olds to work until 9 p.m. on any night during the school year, the bill he signed on Friday allows employers to schedule 14-year-olds to work until 9 p.m., only on nights not preceding a school day. However, this limitation on working hours during school nights does nothing to change overall concerns: that later and longer working hours during the school year threaten children’s well-being and education. The new state law also conflicts with federal law and will sow confusion. Employers who follow new state guidelines will be at high risk of violating the FLSA (which will continue to apply to most Ohio employers) and incurring fines and other enforcement actions from the U.S. Department of Labor. This is a lesson that employers have already learned the hard way in states like Iowa where the National Restaurant Association, NFIB, and others have pushed for similar child labor law changes that put state standards into conflict with federal law.

The outcome this year in Ohio provides a useful illustration of how corporate interests and dark money groups are conspiring to weaken labor standards in state legislatures across the country. Schaffer has championed multiple legislative efforts to roll back child labor protections in Ohio in coordination with industry groups that benefit from weaker standards and has even sought to erode federal child labor standards through a concurrent resolution calling on Congress to weaken the FLSA to match.

Schaffer has been clear about his intention to benefit employers, working closely with lobby groups like the billionaire-founded right-wing dark-money group Americans for Prosperity and state affiliates of industry lobby groups like the National Federation of Independent Business (NFIB) and National Restaurant Association. These organizations have fought at the state and federal level for unpopular child labor rollbacks, as well as blocking minimum wage increases, paid sick leave, and other policies that improve conditions for workers. Schaffer has received legislative awards or campaign endorsements from all three groups.

By repeatedly proposing—and in this case implementing—rollbacks that conflict with federal law, Ohio lawmakers are chipping away at the already fragile federal floor for workplace protections. Industry campaigns to weaken child labor laws are continuing, and there is a very real risk that federal child labor protections could face similar threats. In light of these threats, states should instead pursue policy options to strengthen standards and ensure that young teens who work can do so without harming themselves in the process.

Defenders of the OBBBA cuts claim that, because a large share of these cuts result from introducing new bureaucracy around work-reporting requirements for “able-bodied adults without dependents” (ABAWDs), they will not fall on more vulnerable populations like children or retirees. This is not true. The OBBBA has many near-direct cuts to vulnerable populations’ participation in these programs. More importantly, these cuts will have large spillover effects through families and communities that will harm vulnerable populations—including children.

This post highlights how important Medicaid and SNAP spending is to children, with a particular focus on how these programs support public education. It then outlines some ways that the legislated cuts in the OBBBA will damage this support, either directly or through clear spillover effects through damage to local economies.

The importance of Medicaid and SNAP to children and schooling

Around 40% of school-age children are covered by Medicaid for health insurance, and nearly 30% of school-age children live in families that receive SNAP benefits. Medicaid funding is key for public education. It provides an estimated $7.5 billion annually to public schools to fund essential health and learning and development services. As a share of total K–12 student revenue, Medicaid provides up to 2% of school funding to some states and up to $325 per pupil in revenue in some states.

Medicaid is particularly crucial for special education. Public schools are required by law to provide appropriate care and services for individualized education plans, and Medicaid is a big source of funding for these plans. In a recent survey of school districts, 86% reported they use Medicaid funds for school health staff salaries, and 59% use the funds for contracted services for mental and behavioral health. When asked what they would have to cut if they lost Medicaid funding, 8 in 10 school district staff predicted reductions in school health personnel and services.

How Medicaid and SNAP cuts will still harm children through direct fiscal pressures

While the OBBBA cuts to Medicaid and SNAP do not directly harm children through cuts in children’s health insurance or their food stamp eligibility, changes to eligibility criteria and cost pressures on state budgets will make it onerous to maintain current spending levels for one of the main public institutions that support children: public schools. For example, if states want to maintain coverage for any ABAWDs who lose coverage because of the work requirements stipulated in the OBBBA, states will have to come up with funding for it themselves.  Additionally, the SNAP legislation requires that states now pay for 25% of their administrative costs that previously were fully funded from federal sources. With less federal money, states will either have to cut spending elsewhere in their budgets or (preferably, but politically difficult) raise revenue. None of these are easy political choices, and they all have some spillover effects. As one of the largest budget items in states, K–12 education funding will likely be squeezed in any state looking to maintain any of the services cut in the OBBBA without raising revenue.

How Medicaid and SNAP cuts will harm children through damage to local economies

Beyond these direct budgetary impacts, the OBBBA Medicaid and SNAP cuts could also reduce purchasing power in local economies and put upward pressure on unemployment rates, which could reduce economic security and opportunity for children in those areas.  Adults who receive Medicaid and SNAP don’t have to use their household budget to pay for health care or (some) groceries. Medicaid and SNAP allow them to maintain access to these necessities while also purchasing other goods in their local economy, such as electricity, child care, or rent. When these programs are cut, people face higher health and food costs, which can force them to cut back on purchases and reduce demand throughout the local economy.  

Moreover, areas particularly dependent on Medicaid and SNAP funding are least likely to be able to weather a reduction in aggregate demand for goods and services. Figure A shows that there is a clear positive relationship between a county’s unemployment rate and the income from Medicaid and SNAP. In other words, counties with high unemployment levels are also counties where a large share of their total income comes from Medicaid and SNAP funding.  

To be fair, at the national level, it is possible that the reduction in spending caused by Medicaid and SNAP cuts will be neutralized by policies that raise incomes and demand elsewhere (say, by the tax cut provisions of the OBBBA or a Federal Reserve interest rate cut). But areas that are already facing high unemployment are missing out on positive trends in the U.S. economy. For these counties, the demand shock caused by Medicaid and SNAP cuts could be large, leading to job loss in these counties.

Damage to local economies hurts students and workers

Job loss from the spillover effects of the OBBBA cuts to local economies will create stress and financial insecurity for families, a catastrophe that research has shown can harm student achievement.

Parental job loss plays a key role in reducing parent and child well-being  and has been shown to  reduce a child’s likelihood of grade completion. Moreover, parental job loss is associated with a lower likelihood of obtaining postsecondary education, particularly in Black families. Causal evidence on community level job losses found a reduction in test scores for students, following the closing of a business. The effects were stronger for older children and for children in lower-income households. Even if the Medicaid cuts mostly target adults (ABAWDS), the reduction in local aggregate demand stemming from these funding cuts will hurt all families in a given region, and particularly for children, stand to harm their educational achievement. 

Conclusion

The cuts to Medicaid and SNAP mandated by the OBBBA will harm children. Medicaid and SNAP currently fund key health and food services for public education, and while these functions aren’t directly threatened under the OBBBA, the cost pressures states will face from federal funding cuts will threaten the ability of these programs to serve students. Moreover, there are clear spillover effects through damage to local economies. By reducing the amount of available income in these areas, Medicaid and SNAP cuts run the risk of imposing a sharp anti-stimulus to local economies. This effect could be large in demand-constrained counties (studies on the multiplier effect of Medicaid consistently show it has large effects on spending).   The claim that OBBBA won’t harm children is patently wrong, and the harms from it will plague children for a long time to come.

As part of the passage of ARPA, the U.S. Department of the Treasury issued extensive rules outlining both how State and Local Fiscal Recovery Funds (SLFRF) could be spent and how the spending should be tracked. Unlike most other federal disbursements to state and local governments, recipients had great discretion in how they used their SLFRF allocation. This was one of the great strengths of the program, as it allowed each recipient to tailor its use of the funds to meet their specific needs.

Because of the wide flexibility they were given, state and local governments had to follow very clear procedures in accounting for the funds. Passing a budget alone was insufficient; governments had to formally obligate their ARPA funds through written contracts or interagency memoranda.

While this process did indeed cause some confusion, especially among smaller local governments with less experience dealing with federal funds, Treasury provided local governments with regular updates, held informative webinars, and created an extensive FAQ document to address the many issues that arose. Additionally, groups like the National League of Cities and the National Association of Counties provided extensive assistance to local governments to help them navigate SLFRF.

Pulaski County, like all other cities, counties, states, and tribal governments, was required to fully obligate its fiscal recovery funds by December 31, 2024. Despite this, the Democrat-Gazette found that the county could not account for over half of the funds it received—at least $38.6 million of the $76 million—and much of the information the county did provide the paper did not meet the Treasury Department’s reporting standards.

An EPI analysis of the county’s most recent filings with Treasury, from the end of 2025, bear this out. Pulaski County reported over $41 million falling under “Administrative Expenses,” but that category is supposed to be used only for the costs of “administering the SLFRF program.” Only five governments (out of more than 30,000 total state and local governments receiving funds) reported spending more than $41 million on administrative expenses: Three were states/commonwealths, and the other two were the City of Detroit and Fulton County, Georgia, whose SLFRF allocations were much larger than Pulaski County’s. It is difficult to imagine that Pulaski County needed to use 54% of its total SLFRF funds just to administer its use of SLFRF funds.

Moreover, the Democrat-Gazette reported the county’s reserve fund ballooned by almost $40 million during the same period. Treasury’s rules specifically prohibit SLFRF from being used for rainy-day funds or to replenish reserves. The funds were intended to be spent to address the myriad challenges arising from the COVID-19 pandemic.

SLFRF was a vital resource

It is important that state and local governments are held to account for their use of fiscal recovery funds. The case of Pulaski County illustrates that accountability safeguards for the program are necessary and effective rather than being bureaucratic burdens. Pulaski County’s apparent failure to follow the guidelines for using SLFRF funds is a rare exception. The Treasury Department implemented a novel, flexible program with guardrails and responsibilities that the vast majority of state and local governments were able to abide by. SLFRF was a vital component of ARPA, and did much to speed the economic recovery and prevent a Great Recession like the U.S. saw in 2008–2009.

SLFRF was vital in preserving and rebuilding the public-sector workforce. In the wake of the Great Recession, it took 11 years for state and local government employment to recover. Because of SLFRF, it took a fraction of that time (just three years and eight months) for the public sector to recover from the COVID-19 downturn. This rapid recovery mirrored the recovery of the overall job market. The typical U.S. state needed 77 months after the start of the Great Recession for its job numbers to recover; it only took 29 months after the beginning of the COVID-19 pandemic for the same level of recovery.

Additionally, SLFRF allowed states and localities to enact programs of social insurance and income support that directly responded to immediate community needs. In just the first two years of SLFRF’s operation alone, more than 4.5 million households received mortgage, rent, or utility assistance. Emergency programs offered housing to people who had been displaced by the pandemic and direct government assistance to food pantries and other programs that helped people facing food insecurity. These programs were valuable tools for helping working families in need.

Pulaski County, therefore, missed a tremendous opportunity to use its fiscal recovery funds to spur economic recovery and provide assistance to working families. The $350 billion SLFRF program was a vital resource during the pandemic and its aftermath. The example of Pulaski County demonstrates the importance of federal accountability requirements for largely unrestricted funds, not the failure of the program. Lessons from the vast majority of localities that successfully used SLFRF funds and the rare exceptions in which local governments failed to do so should continue to inform future policy design for similar programs.

Today's jobs report came in weaker than expected. The economy added 57k jobs in June and prior months were revised down. April and May are a combined 74k lower than previously reported. Analysts believe the World Cup added 40k to June numbers—without that, job growth would have been 17k.
#EconSky

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— Elise Gould (@elisegould.bsky.social) July 2, 2026 at 8:48 AM

The household survey came in even weaker. While the topline unemployment rate ticked down, it happened for the wrong reasons as labor force participation fell by 720k while employment fell by 507k. Even the prime-age employment-to-population ratio, which had remained resilient, fell 0.6ppts in June.

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— Elise Gould (@elisegould.bsky.social) July 2, 2026 at 8:58 AM

Given expectations around the World Cup, it's surprising to me that leisure and hospitality fell by 61k in June (and May growth was revised down by 30k). Perhaps those gains are offset by reduced discretionary spending as real wages fall.
#NumbersDay #EconSky

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— Elise Gould (@elisegould.bsky.social) July 2, 2026 at 9:18 AM

We won't get the inflation data for June until July 14, but recent price data suggest year over year real wages likely fell in June. Workers and their families are finding it increasingly difficult to make ends meet and real wages are most surely now below where they were in January 2025.
#EconSky

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— Elise Gould (@elisegould.bsky.social) July 2, 2026 at 9:18 AM

Manufacturing employment is crawling along, gaining 3k jobs in June, all in durable goods. After downward revisions, manufacturing lost jobs in May.

Since January 2025 when Trump took office, the manufacturing sector has lost 75,000 jobs.

#EconSky

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— Elise Gould (@elisegould.bsky.social) July 2, 2026 at 9:30 AM

While there's been little change this year, federal employment has shrunk an alarming 324,000 jobs since January 2025. The vital services federal employees provide cannot be done without these essential workers.
#NumbersDay #EconSky

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— Elise Gould (@elisegould.bsky.social) July 2, 2026 at 9:31 AM

In the last two years, Republicans in Tennessee have attempted to push legislation that would violate Plyler to set the stage to challenge the court decision (although neither proposal passed). Last year, the state proposed charging undocumented students tuition for public schools, and this year, Tennessee attempted to pass legislation to track the immigration status of all public school students.

The 1982 ruling of Plyler v. Doe is notable because it stated that the harm of not educating undocumented children would be worse for society than providing a basic education to all children in the U.S. The ruling recognized the huge positive spillovers public education has on the U.S. labor market, public health, and civil society and that leaving immigrant children out of public education would create an “underclass” in U.S. society.

Moreover, if the move to deny public education to children in the U.S. is successful, particularly in pockets of the country where immigrant children are a substantial share of the student population, it will lead to an extraordinarily high cost for the students who remain in public school.

Some school costs are hard to adjust, regardless of the number of students

Across the country, an estimated 17% of school-aged children live with at least one noncitizen adult, according to the Kaiser Family Foundation. If these students were to leave suddenly, schools would be left to educate a fewer number of kids without any time to adjust their fixed costs. For example, when Alabama passed an immigration data collection law, more than 13% of Hispanic schoolchildren withdrew from classes.

At first, it would seem that reducing enrollment would reduce both total revenue and the number of students needing educational services proportionately, which should leave the schools’ ability to provide education unaffected. But schools can’t adjust every educational cost quickly: School bus routes still need to circulate to all stops, even if there is one fewer child in need of transit; buildings need to be heated and cooled, even if classroom size goes down; and guidance counselors and support staff are still required to support the remaining students.

School districts will pay more per pupil if student enrollment declines because of immigration enforcement

Since these fixed costs can’t be adjusted in the short run, when total revenue declines due to families’ fears of deportation, districts are stuck paying more per pupil on costs they can’t adjust. Effectively, native-born students who remain in public schools receive no additional benefit when immigrant students are denied services and rights. Districts instead will be paying more on costs that can’t be adjusted and getting less on the costs that can be adjusted for fewer students.

Calculating the cost under two different scenarios

We call all the costs of downward adjustment that occur when enrollment is reduced the fiscal externality. This means the per-pupil funds each district would require to maintain the same level of spending for remaining public school students due to a rapid decline in enrollment. This cost is entirely borne by state and local education budgets and leaves districts unable to deliver the same level of instruction to the remaining public-school pupils.

For districts with a large share of school-aged children in immigrant families, the costs of losing these students could be substantial. Table 1 shows the top-25 school districts, based on the number of K–12 students that are in immigrant families and the corresponding fiscal externality for two scenarios. In the first scenario, half of these students stop attending public school (referred to as the lower bound in the table). In the second scenario, all of these students stop attending public school (referred to as the upper bound in the table).

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The implications of a reversal of Plyler v. Doe or any type of policy restricting immigrant children’s access to public education would be extreme for these districts. In Houston, Texas, where 62% of students in the school district are Hispanic, we estimate that nearly 63,000 students may live in a household with immigrants and as such, might be vulnerable to dropping out of school due to anti-immigration efforts. The lower bound shows the costs if half of these students stopped showing up. Houston School District would have to reduce services by $1,654 for each remaining (and disproportionately native-born) public school student. This decline translates to a total fiscal externality of $268 million a year, or 11% of the total budget for the school district.

The extraordinarily high cost to native-born students of losing students in immigrant families due to anti-immigrant policies highlights the hypocrisy in the anti-immigrant movement. If all students in immigrant families stopped attending public school tomorrow, not only would those students suffer from the lack of public education, but the quality of public education would be much worse for the remaining students in those same schools. In short, no one wins. When the costs are tallied up, it’s clear that these policies are not about improving education quality for native-born students, but instead are malicious attacks on the institution of public education in the U.S.

Figure A

These increases continue to be crucial for low-wage workers as they contend with the affordability crisis. The average increase in annual wages for a full-time, year-round worker resulting from these minimum-wage hikes ranges from $573 in Oregon to $811 in Alaska. These pay raises directly boost workers’ incomes, giving them a leg-up in the race against rising prices—a straightforward example of how policymakers can often more easily tackle affordability challenges through policy decisions that boost wages, such as setting strong wage floors.

A higher minimum wage has a positive impact on more than just the workers who currently earn the minimum wage; indirectly affected workers will see their pay go up too as employers adjust their wage ladders to the new wage floor. Our analysis of the increases in Alaska, Oregon, and Washington, D.C., accounts for these “spillover” effects and finds:

• Women make up more than half (56.3%) of affected workers.
• The wage increases disproportionately benefit Black and Hispanic workers. Black workers make up 15.3% of affected workers, despite making up 10.4% of the workforce across the three areas. Hispanic workers make up a similar percentage of the workforce (12.4%) but make up more than a fourth (26.0%) of affected workers.
• The vast majority (89.3%) of affected workers are age 20 or older, and more than 3 in 5 workers (62.1%) are 25 or older.
• More than half (52.9%) of the affected workers work full-time.
• The increases will raise wages for those who need it the most. Half (50.5%) of affected workers belong to households whose incomes are less than 200% of the poverty line.
• More than 1 in 5 (23.6%) of affected workers are parents.

Table 1

State and local policymakers should combat cost-of-living challenges with minimum wages

Because costs of living can vary significantly within a state, local policymakers should establish strong wage floors if the state minimum wage is inadequate for their area. In June, city councilors in Albuquerque, New Mexico, took an important step in that direction, passing a minimum-wage increase to $15 an hour by 2029. Whereas the current state minimum in New Mexico is $12 an hour, EPI’s Family Budget Calculator shows that a living wage for a single adult working full-time in Albuquerque is $17.56 an hour.1 The proactive step taken by local elected officials will provide significantly more economic security for low-wage workers in the city.

This summer, the minimum wage will increase in localities in California, Illinois, and Maryland (Table 2) due to “indexing”—automatic annual adjustments written into the minimum-wage law that require the wage floor be adjusted for price increases each year. Without indexing, the minimum wage is worth less and less every year as prices rise. With time, this can dramatically erode the value of the minimum wage. For example, the federal minimum wage of $7.25 an hour—which has not increased since 2009—has now lost 30% of its purchasing power.

Table 2

Indexing to inflation is a commonsense policy enacted in dozens of cities and states across the country, but it is not the strongest way to protect the value of the minimum wage. Adjusting for price increases mostly protects the real value of a low-wage worker’s paycheck (although low-wage workers are more vulnerable to inflation than top-of-the-line inflation measures indicate). However, in a well-functioning economy, wages for most workers—especially higher wage workers—will grow faster than inflation. If the minimum wage only rises at the rate of price growth, then over time, this can increase inequality between low-wage workers and everyone else.

One way to address this issue and ensure that low-wage workers do not fall further away from the middle class is to index the minimum wage to median wage growth. EPI’s latest vision for a federal minimum wage explicitly targets a wage floor that rises to two-thirds of the median wage and remains indexed there thereafter. This policy both creates a high floor that provides significantly higher wages for workers across the country and protects the minimum wage’s value against price increases and increases in wage inequality over time.

Oklahoma fails to pass minimum-wage ballot measure

In June, a minority of eligible Oklahoma voters rejected a ballot initiative (State Question 832) that would have increased the state’s minimum wage to $15 an hour by 2029. The initiative’s failure is a costly missed opportunity to increase wages for Oklahoma workers. More than 1 in 5 workers in the state earn less than $15 an hour, and if passed, the ballot initiative would have provided more than $783 million in increased earnings for low-wage workers.

During a time when cost of living and inflation are some of the most important concerns for voters, Oklahomans might have worried that increasing the minimum wage would have hurt affordability in the state. In fact, the opposite is true. Although raising the minimum wage can lead some affected businesses to increase prices, the resulting price increases are extremely modest—far smaller than the increase in pay that would go to low-wage workers. Even some of the most ambitious wage floor policies, such as California’s $20 fast food minimum wage, only increased fast-food prices 2.1% (around eight cents for a $4 item). A 10% increase in the minimum wage is associated with a 0.14 percentage point increase in CPI increase. In contrast, a 10% minimum-wage increase boosts income at the 10th percentile by around 3.6%, an order of magnitude greater. The average full-time, year-round Oklahoman worker affected by SQ 832 would have gained $2,322 in annual wages if voters had approved the initiative.

It is also important to highlight SQ 832’s winding path to the ballot. Ballot initiatives have historically been an important mechanism for passing minimum-wage increases in states with conservative-dominated legislatures like Florida, Missouri, and Nebraska. While Oklahoma is one of only three states in the South that has a ballot initiative process, conservative politicians have been increasingly curtailing it.

The Oklahoma minimum-wage ballot initiative is a prime example of this. Advocates originally began collecting signatures for SQ 832 in the lead-up to the November 2024 general election. Despite collecting nearly twice the necessary signatures in enough time to qualify for the ballot, advocates were thwarted when Governor Kevin Stitt delayed the State Question until the June 2026 gubernatorial primary election, a low turnout election in contrast to a general election with presidential candidates on the ballot. Voter turnout in the 2026 primary election was 26%, around half of what it was in the 2024 election.

In response to the emergence of SQ 832, the Oklahoma legislature also passed restrictions on the signature-gathering process, limiting the number of signatures that can be gathered from populous areas like Tulsa and Oklahoma City. These restrictions will make it more costly and logistically challenging to pass a future minimum-wage increase in Oklahoma. With such low voter turnout and marked interference in the ballot initiative process, it is difficult to say that SQ 832’s failure reflects a lack of popular support for minimum-wage increases in Oklahoma. Regardless of the cause, without a future minimum-wage increase, the issue of low pay in Oklahoma is only going to grow.

When policymakers like those in Oklahoma fail to adequately set the wage floor, it suppresses worker pay, not just for the lowest-paid workers, but for low-wage workers in general. Workers need a raise to help them overcome the affordability crisis, and the minimum wage is an evidence-backed tool under policymakers’ control to help them do that.

1. Assuming 81% of income comes from wages.

According to today’s Consumer Price Index (CPI) release, overall inflation was 4.2% over the last year. The sudden burst in inflation, along with slowing nominal wage growth, means that the average hourly real wage for private-sector workers is now no higher than it was in January 2025.

So far, excessive inflation has been limited to energy and airfares. But as long as the war continues, there is a heightened threat that price increases will spill over to the broader economy, triggering a more permanent increase in the cost of living and further reductions in real earnings.

Over the last five years, workers have won unions in several high-profile campaigns, including Amazon workers in Staten Island and Starbucks workers in Buffalo. These examples are a testament to workers’ determination and desire for greater agency in their workplace. But these Amazon and Starbucks workers have yet to reach a first contract with their employer, illustrating the issues many workers face when they win a union and begin collectively bargaining. Far too often, employers refuse to bargain in good faith with workers, significantly delaying a first contract. Currently, on average, it takes workers 465 days to bargain a first contract.

Today, the U.S. House of Representatives will likely consider legislation aimed at ensuring workers can reach a first contract without unnecessary delay. The Faster Labor Contracts Act establishes a timeline from bargaining to mediations and, if necessary, binding arbitration. These provisions discourage delay and promote good-faith bargaining, which is exactly how the law should work.

Corporate mergers and acquisitions are an example of how quickly employers can reach a deal when they want to: these complicated, multibillion-dollar deals can often be reached in a matter of weeks. When these corporate deals take longer, it is often due to government regulators challenging the legality of the corporate merger—not corporate conduct.

To demonstrate the difference in corporate conduct in bargaining with workers for a first contract versus corporate mergers and acquisitions, Table 1 shows examples of companies who have engaged in negotiations with workers and corporate mergers. While Starbucks completed a merger in 67 days, they have taken at least 1,643 days (and counting) to bargain a first contract with their unionized workers.

It is clear that corporations can move quickly to reach a deal related to a merger or acquisition but are far too often unwilling to apply that same priority to negotiations with their workforce for a fair first contract.

Table 1

The authors thank the Student Policy Network at the University of Notre Dame for their contribution to this research. 

The latest jobs report came in stronger than expected this morning. The economy added 172,000 jobs in May and the unemployment rate held steady at 4.3%. Nominal wage growth continued to decelerate, further exacerbating affordability as prices rise.
#EconSky #NumbersDay @epi.org

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— Elise Gould (@elisegould.bsky.social) 7:46 AM · Jun 5, 2026

Job growth was strongest in leisure and hospitality, state and local governments, and health care. Losses continued in financial activities in May.

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— Elise Gould (@elisegould.bsky.social) 7:58 AM · Jun 5, 2026

Manufacturing employment rose by 7,000 in May, slowly clawing back the large losses last year.

Since January 2025 when Trump took office, the manufacturing sector has lost 68,000 jobs.

#EconSky

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— Elise Gould (@elisegould.bsky.social) 8:00 AM · Jun 5, 2026

While there’s been little change this year, federal employment has shrunk an alarming 333k jobs since Jan 2025. The vital services federal employees provide cannot be done without these essential workers.
#NumbersDay #EconSky

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— Elise Gould (@elisegould.bsky.social) 8:08 AM · Jun 5, 2026

Nominal wage growth continued to slow in May, now 3.4% over the year. While we don’t get the May inflation data until next week, it’s very likely, given recent trends, that real wages will continue to fall and workers and their families will find it increasingly difficult to make ends meet.
#EconSky

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— Elise Gould (@elisegould.bsky.social) 8:14 AM · Jun 5, 2026