Bill would raise minimum hourly wage to $15

Hawaii’s hourly minimum wage would increase over two years to $15 by 2020 under a proposal advanced Tuesday by the Senate Labor Committee.

Senate Bill 2291 would raise the state’s minimum wage from $10.10 an hour to $12.25 per hour in 2019, and to $15 per hour the following year — a 48 percent increase overall. The rate increased to its current level on Jan. 1, the final of four annual increases that began in 2015.

Hawaii is one of 13 states with a minimum wage of $10 an hour or higher. An estimated 4.6 percent of hourly workers in the state, or about 30,000 employees, are paid the minimum wage, according to Bureau of Labor Statistics data.

The proposal was widely supported by labor organizations and individuals who said Hawaii’s high cost of living quickly eats up wages here, but was strongly opposed by employers who contend costs are too high.

The Hawaii Appleseed Center for Law &Economic Justice testified that at $10.10 per hour a person working full time with no days off earns $21,000 a year in gross income. “With the highest cost of living in the nation, mainly caused by sharp increases in the cost of housing, $10.10 is not a living wage for a single adult in Hawaii, much less adults supporting children and others,” the center said.

Unite Here Local 5, a labor organization representing 11,000 hotel, health care and food-service workers, testified that working families struggle to survive on the current minimum wage.

“Record numbers of tourists are visiting our islands. Our No. 1 industry is doing well. Yet the quality of life for ordinary working people in our communities remains stagnant at best. Our low unemployment rate is disguised by the fact that more and more of our local people are having to work multiple jobs just to remain in the islands,” the union testified.

But Dirk Koeppenkastrop, founder of IL Gelato Hawaii, which runs three ice cream shops on Oahu with roughly 50 employees, said if payroll costs continue to rise, he likely won’t be able to stay in business. He said his stores already charge $3.75 per scoop, which online reviewers complain is too expensive for local families.

“Most of our employees are high school students and first-job-havers. … With the increasing wages, it’s becoming more and more difficult for us to stay in business, because besides the high rents in Hawaii, high insurances, high food costs, high everything, the labor is becoming higher and higher so there’s very little room for us to survive,” Koeppenkastrop told lawmakers.

The Chamber of Commerce Hawaii, Retail Merchants of Hawaii, Hawaii Restaurant Association, National Federation of Independent Business and Hawaii Food Industry Association also were among those opposing the measure.

Chamber President and CEO Sherry Menor-­McNamara said that because Hawaii requires employers to provide health insurance to its employees, including part-time workers, the cost of the proposed wage hikes would be much higher than just the hourly increases.

“This is a huge increase for business, at a time when other costs such as health care and other mandates are on the rise. Should this bill pass, it will seriously harm local businesses, the state economy, job creation and potentially the very employees it is trying to help,” the chamber testified.

Senate Labor Chairwoman Jill Tokuda acknowledged there are “passionate voices on both sides of the issue,” but cited the importance of income equity in moving the bill forward. It next heads before the Senate Ways and Means Committee.