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Hawaii legislators could boost minimum wage to $12 next year

A bill to raise Hawaii’s minimum wage to $12 in July 2022 passed unanimously out of its first committee Monday, with more than 180 individuals and groups testifying in favor, most saying it should be much higher.

Hawaii’s minimum wage is $10.10 per hour, a rate that took effect in January 2018. President Joe Biden has embraced the national “Fight for $15” campaign and is pushing to make it the federal minimum.

“Twelve dollars an hour is a start but still is not even close to a living wage,” Patrick Switzer testified to the Senate Committee on Labor, Culture and the Arts. “As a registered nurse working in Honolulu, I can tell you this increase would be a lifeline to the working poor, who are faced with impossible decisions each day, such as deciding between purchasing food for their kids and paying utility bills.”

The Senate Committee on Labor, Culture and the Arts voted 5-0 to advance Senate Bill 676, which was introduced by Chairman Brian Taniguchi. Republican Kurt Fevella voted yes with reservations.

The bill is one of several introduced this year to raise the minimum wage, some targeting $17 an hour by 2026. It is the first to be scheduled for a hearing.

Local business interest groups and various individual employers decried the measure, saying this is the wrong time to force them to pay their workers more, when most businesses are struggling to stay afloat during the coronavirus pandemic.

“Our membership is really in dire straits,” said Victor Lim, representing the Hawaii Restaurant Association. “We need time to recover from the pandemic. We really cannot absorb any additional costs.”

Opponents include the Chamber of Commerce Hawaii and its affiliates, Retail Merchants of Hawaii, Hawaii Restaurant Association, National Federation of Independent Businesses, Hawaii Transportation Association and businesses such as 7-Eleven Hawaii, Gyotaku Japanese Restaurants and Highway Inn.

“The fact is that raising the minimum wage will force more Hawaii businesses to cut staff and close,” testified Lauren Zirbel, executive director of the Hawaii Food Industry Association. “Our state has been the hardest hit by the economic crisis caused by the COVID-19 pandemic. … This bill is not the right choice right now.”

Advocates for the bill argued that with Hawaii’s high cost of living, an increase in the minimum wage is vital for workers at the bottom of the scale. Many are considered essential and have been on the front lines during the pandemic and need the help, they testified. The $12 minimum would not take effect until July 1, 2022.

“Currently, 10 states and the District of Columbia have minimum wages higher than Hawaii,” testified Gary Hooser, executive director of Pono Hawaii Initiative. “Pandemic or no pandemic, 27 other states are raising their minimum wage this year. Hawaii needs to be No. 28.”

Other groups weighing in on behalf of the measure included Living Wage Hawaii, Hawaii Appleseed Center for Law &Economic Justice, Common Cause Hawaii, League of Women Voters of Hawaii, Americans for Democratic Action and labor unions such as the ILWU, Hawaii Government Employees Association and Hawaii State Teachers Association.

They argued that raising the minimum wage would provide an economic boost because low-wage earners will promptly spend that money locally. Many pushed to raise it gradually to $17 by 2026.

“Research shows that increasing minimum wage increases spending, putting money right back into local stores and restaurants,” the Appleseed Center testified. “Raising the minimum wage helps keep money in our state by directing it at the wallets of local workers, rather than out-of-state corporate headquarters and stockholders.”

Taniguchi said the committee received 181 pieces of testimony in support, 22 in opposition and 15 providing comments before the hearing started.

Most testimony came in written form from individuals, with messages that were short and to the point.

“This is the least we can do to support our fellow citizens who are struggling to live in dignity,” wrote James Tolley.

The minimum wage in Hawaii stagnated at $7.25 an hour from 2007 through 2014. Advocates point out that even as it was increased annually between 2015 and 2018 to $10.10, the state’s unemployment rate fell to an all-time low of 2% in 2018.

But businesses fear increasing the wage will push up prices for consumers, overburden businesses and prompt more layoffs.

“Local businesses are barely surviving, with many having already closed for good,” testified Gary Yoshi­oka on behalf of Diamond Bakery Co. “Keep the businesses open for jobs that give paychecks. We can look at wages once we have economic momentum.”

SB 676 next heads to the Ways and Means and Judiciary committees. Other bills that would raise Hawaii’s minimum wage include HB 4, HB 600, SB 285, SB 294 and HB 1201, but none has yet been scheduled for a hearing.

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