State Sen. Clayton Hee challenged the Senate on Wednesday to hear a new minimum wage bill while labor and social-service advocates warned lawmakers not to let a pay raise for low-income workers drift into the morass of election-year political maneuvering.
A minimum wage increase failed last session under murky circumstances involving the tip credit — the amount businesses can deduct from restaurant staff and other workers who earn tips. This session, Hee, chairman of the Senate Judiciary and Labor Committee, and Rep. Mark Nakashima, chairman of the House Labor and Public Employment Committee, have advanced new bills that would increase the minimum wage, link future adjustments to the Consumer Price Index, and eliminate the tip credit entirely.
Hee (D, Heeia-Laie-Waialua) and Nakashima (D, Kukuihaele-Laupahoehoe-North Hilo) have set down specific markers, so there is no ambiguity — like there was last session — about where the main negotiators stand. The political pressure is mostly on the Senate, where Senate President Donna Mercado Kim and Sen. David Ige, chairman of the Senate Ways and Means Committee, were widely viewed as the hurdles to a minimum wage increase last session because they preferred a higher tip credit.
Kim is running in the Democratic primary for Congress and Ige is challenging Gov. Neil Abercrombie in the Democratic primary for governor, and neither can afford to alienate core Democrats who have made the minimum wage a priority.
Both Kim (D, Kalihi Valley-Moanalua-Halawa) and Ige (D, Pearl Harbor-Pearl City-Aiea) say they support a minimum wage increase and are committed to passing legislation this session. Ige issued a statement Tuesday that said lawmakers could take action immediately by reviving the bill that stalled in conference committee last session rather than move new drafts through the legislative process.
Hee and many labor and social-service advocates interpreted Ige’s statement as a signal that he would not hear the new Senate draft in his committee.
Ige said Wednesday that he had not decided how to proceed.
"The fastest way to increase the minimum wage in Hawaii is to deal with the bill in conference, and I issued the statement to that effect," he said. "That’s not the only way."
Hee took to the Senate floor on Wednesday and put Ige and other senators on notice about his position. He said the new Senate draft is a "dramatic departure" from the bill in conference last session.
He said he would not give prior concurrence to Ige, if he were to hold a hearing, to change the new draft and alter the amount of the minimum wage increase, the link to the Consumer Price Index, and the elimination of the tip credit. He invited senators to debate those issues once the bill reaches the Senate floor.
Committee chairmen generally have to agree to substantive changes in bills they have jurisdiction over as the bills move through the committee process.
"Let us do what we were elected to do," Hee said of a floor debate. "Debate that issue right here on the blue carpet."
Skirmishes over process are often early warning signs that legislation is in trouble. At the start of session in January, there was broad consensus among Abercrombie and majority House and Senate Democrats for a minimum wage increase and some reasonable accommodation on a tip credit. Opponents had largely been pushed into the margins.
Some House and Senate lawmakers had wanted to fast-track a minimum wage bill early so it would not again be subject to the uncertainty of conference committee negotiations at the end of session.
House Majority Leader Scott Saiki (D, Downtown-Kakaako-McCully) said Wednesday that House and Senate negotiators could still go to conference early if they can reach an agreement on a bill. He said that would require an agreement between Hee and Nakashima — the labor chairmen — and Ige and Rep. Sylvia Luke (D, Punchbowl-Pauoa-Nuuanu), who lead the finance committees.
The $7.25-an-hour minimum wage has not been increased in Hawaii since 2007. The tip credit is 25 cents. The state Department of Labor and Industrial Relations has told lawmakers that average weekly earnings have grown by 12 percent since the minimum wage was last raised. Twenty-one states and Washington, D.C., have higher minimum wages than Hawaii, where the cost of living is among the highest in the country.
Just 2.2 percent of Hawaii’s labor force earned $7.25 an hour or less in 2012, according to the department, split about evenly between men and women.
Most states — 43 — have tip credits, the department found. Two out of three tipped workers nationally are women, and one out of three are parents.
The Hawaii Food Industry Association, the Chamber of Commerce of Hawaii and several small-business owners have warned that a minimum wage increase could cause businesses to lay off workers or raise prices.
The new House draft — House Bill 2580 — would gradually increase the minimum wage until it reaches $9.50 an hour by January 2017. In future years, the wage would be adjusted based on the Consumer Price Index. The 25-cent tip credit would be eliminated.
The new Senate draft — SB 2609 — would gradually raise the minimum wage to $10.10 an hour by January 2017. Future increases would be tied to the Consumer Price Index. The tip credit would be repealed.
Dozens of activists with the "Hawaii Needs A Raise" coalition held a rally at the state Capitol on Wednesday afternoon where they called for a $10.10 minimum wage, a tie to the Consumer Price Index and the end of the tip credit. The activists marched to Ige’s and Luke’s offices and delivered oversized letters urging them to hear the new Senate and House drafts and not the bill left over from conference last session.
