Workers favor, businesses wary of bill to raise minimum wage

An increase in the minimum wage in Hawaii to $8.75 an hour from $7.25 would be the first since 2006 when it rose by 50 cents.

In his State of the State address Tuesday, Gov. Neil Abercrombie said he will propose a bill to increase the wage starting in January 2014.

"Many of Hawaii’s residents are the products of plantation-era workers — people who worked and toiled in the fields, earning the bare minimum in order to afford a better opportunity for their families," Abercrombie said. "Today there still exists a hardworking sector of our society that deserves continued recognition. These are the working-class residents who earn the minimum wage."

The governor said 19 states plus the District of Columbia have higher minimums.

The gallery erupted in applause when the governor proposed the $1.50 increase.

Eric Kane of Waimanalo, who was waiting for a bus Tuesday afternoon on Hotel Street, said an increase would help people like his 20-year-old son, who lives at home and helps pay some utility bills with what he earns at McDonald’s.

"I think that’s good for young people living at home," Kane said of the proposed increase. "Anybody else should get at least 10 (dollars) if you look at the real cost of things."

Senate President Donna Mercado Kim said she fears a steep increase could cause businesses to lay off workers.

"I acknowledge the fact that a lot of our workers deserve an increase. What that increase should be, we have to balance that out with our businesses," said Kim (D, Kalihi Valley-Moanalua-Halawa). "Many of our smaller businesses have been closing down, our mom-and-pop businesses, and the burdens that we put on them in addition to the minimum wage — what kind of taxes, unemployment insurance and all of those things have to be taken into consideration."

Ryan Sanada, assistant general counsel at the Hawaii Employers Council, agreed the proposed increase is high.

"A dollar fifty is basically over 20 percent of the current minimum wage," Sanada said. "In the private sector you rarely see a wage increase of 20 percent. … We appear to be coming out of the recession, but I don’t think we’re coming out of it yet, so a raise of $1.50 seems to be pretty big to me at this time."

According to U.S. Department of Labor data dating to 1968, the minimum wage in Hawaii has generally remained the same through several years.

The minimum jumped to $5.25 in 1994 from the $3.85 it had been for a few years and remained there until 2002, when it was increased to $5.75. In 2003 the wage increased to $6.25 and remained there until 2006 when there was a one-year, 50-cent bump. Then in 2007 it was raised to $7.25.

Although the minimum wage in the islands usually goes unchanged for many years, Labor Department data show it has been above the federal minimum wage for most of the past 45 years, with the exception of a few years in the late 1970s and 1992. The federal minimum caught up to Hawaii’s in 2010 and has not yet moved above it.

Senate Judiciary and Labor Chairman Clayton Hee (D, Heeia-Laie-Waialua) said his committee would give "serious consideration" to the governor’s bill.

"The cost of living here is unlike anything else in the U.S.," Hee said. "It’s no secret that people work more than one job to make ends meet in Hawaii. I believe in light of his announcement, we would be derelict not to consider a minimum wage increase."

House Majority Leader Scott Saiki (D, Downtown-Kakaako-McCully) said he thinks legislators are open to considering an increase this session.

"In the past, I think it’s had an uphill climb, but it’s something that we’re willing to look at," Saiki said. "We know it will generate a lot of comment from both sides, from both the labor side and the business side."

One concern for businesses is that the bill the governor is proposing could tie future increases to the consumer price index.

Hawaii Employers Council’s Sanada said that could be a risky move.

"That’s pretty dangerous because it basically sets the minimum wage based on the economy for one year," he said, cautioning that the economic climate ebbs and flows during long periods of time.

Rep. Mark Nakashima (D, Kukuihaele-Laupahoehoe-North Hilo), chairman of the House Labor Committee, said he has already discussed the bill with some business people, and they too are concerned about the possibility of linking future wage increases to the price index.

In general, though, he said the business community members he talked to "were not adverse to seeing a minimum wage bill go forward," and his committee plans to hear the bill.

Ricky Martinez of Kalihi said he thinks $1.50 is too high a raise.

"I think that’s ridiculous. They shouldn’t be raising it like that," he said.

Reslin Nick of Palolo said an increase would be "awesome" because it would help workers like her husband, who works in the sun as a parking attendant.

"They work for their employer for a long time but still on $7.25," Nick said about minimum-wage workers. "My husband is working hard but it’s little bit. … He deserves that."

Lisa Ellen Smith of Lihue also said she would support a raise.

"When I was mall manager on Kauai, I had several employees that had three jobs," said Smith, who was recently appointed by the governor to serve on the state Commission on the Status of Women. "It (an increase) definitely will impact the people that have to — have to — have more than one job just to provide for their families."