Minimum wage increase in limbo

Time is running out on a proposal that would increase the state’s minimum wage starting in 2014. Lawmakers appear to agree on policy but still need to work out details if they hope to strike a deal before key deadlines this week.

"I think, philosophically, it would seem to me both chambers by and large support a minimum wage increase," state Sen. Clayton Hee, the Senate Judiciary and Labor Committee chairman, said Friday. "I think we’re trying to iron out the details."

They must do so by the end of the week, or such an increase — as proposed by Gov. Neil Abercrombie in his State of the State speech — would have to wait at least another year before being considered.

Lawmakers are coming up against key deadlines to complete negotiations on all bills they plan to pass and send to the governor before the adjournment of the 2013 session next week. Bills with no money attached must be completed by Thursday, while proposals with a fiscal component have until Friday.

The most pressing matter before lawmakers is the state’s biennial budget. Lawmakers on Friday received Abercrombie’s proposal for how to fold in the recent contract agreement signed between the state and the Hawaii State Teachers Association. The agreement calls for an additional $43 million in fiscal year 2014 and $73 million the following year.

A tentative agreement between the state and the United Public Workers union was reached Friday but still requires ratification. Details were not immediately available, but awareness of the deal could influence lawmakers as they craft current tax measures and spending decisions for various state programs. Financial details of the contract likely would be handled in next year’s supplemental budget request.

Three units of the Hawaii Government Employees Association also have a tentative pact.

Negotiators are scheduled to meet again on the budget later tonight.

Meanwhile, lawmakers continue work on a slew of other bills, with priority being placed on proposals for early-childhood education programs, adjustments to the state’s solar tax credits and establishing a loan program providing consumers with greater access to solar systems.

One measure yet to be discussed in conference is the minimum wage proposal.

The measure has stalled in the Senate, where President Donna Mercado Kim (D, Kalihi Valley-Moana­lua-Halawa) has yet to appoint conferees to negotiate differences in the bill with the House.

Kim did not return telephone messages seeking comment Friday, but in the past she has expressed concern that a steep increase in the minimum wage could force businesses to lay off workers.

"I acknowledge the fact that a lot of our workers deserve an increase," Kim said after the State of the State speech. "What that increase should be, we have to balance that out with our businesses."

Hee (D, Heeia-Laie-Waia­lua) said he had spoken with Kim, and he expects conferees to be appointed.

"I’m presuming there will be a conference," Hee said. "I’m operating under that assumption."

The minimum wage has not increased since 2006, when a 50-cent increase placed it at $7.25 an hour.

Although the minimum wage in Hawaii has generally remained the same through several years, U.S. Department of Labor 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.

Supporters of the increase say it is time to help those earning the least in a state with the highest cost of living in the country. Businesses remain wary of too great an increase in a sluggish economy.

Abercrombie proposed an increase of $1.50. The House and Senate would have to work out differences in the amount and the number of years needed to phase in the increase.

The Senate has approved an increase of $2 phased in over three years, with adjustments in subsequent years tied to the consumer price index for urban wage earners and clerical workers. House lawmakers have approved an increase of $1.75 phased in over four years with no subsequent increases. Both proposals have deleted the tip credit for service employees making less than the minimum wage, keeping it open as a point for negotiations.

"We tried to be sensitive to concerns expressed to us by the Chamber (of Commerce) and the business community," Rep. Mark Naka­shima (D, Kukuihaele-Laupahoehoe-North Hilo), the House labor chairman, said Friday. "We’re looking at something that is more spaced out."

He agreed the two sides are close in philosophy but need to hammer out the details.

"The minimum wage has not increased for a number of years, and during that time prices continue to go up," Naka­shima said.