$12 minimum wage hike clears key Senate committees

Hawaii’s low-wage workers are closer to seeing a hike in the minimum wage to $12 after two key Senate committees approved the increase, but the measure’s prospects in the House of Representatives are less certain. Several House bills that would have increased the minimum wage died this month after the Labor and Tourism Committee declined to hear them.

Senate Bill 676 passed the Senate Ways and Means Committee and Judiciary Committee on Monday following a joint hearing, setting it up for a final vote by the full Senate.

House Majority Leader Della Au Belatti said the House would take a look at the bill, assuming it passes over, but declined to elaborate on its chances. “I think, as with everything, there are different points of view in the House,” she said.

Hawaii’s minimum wage has remained at $10.10 an hour since 2018, which equates to about $21,000 annually for full-time workers. Without the bump, inflation will continue to erode the value of the income. But businesses say now isn’t the time for an increase as they struggle amid the economic devastation brought on by the coronavirus pandemic.

“To say that many businesses here in Hawaii are in dire straits will be an understatement,” the Hawaii Restaurant Association told state lawmakers in testimony on the bill. “This is not the time.”

Those sentiments were echoed by business interests throughout the state, including the Hawaii Chamber of Commerce, Hawaii Transportation Association, Hawaii Food Industry Association, Retail Merchants of Hawaii and numerous individual business owners who wrote to the committees to voice their concerns.

“This is crazy. We are in the middle of the worst unemployment crisis in modern history. Companies are struggling to remain in business and you pick this time to consider raising the minimum wage?” wrote Steve Chaikin of Molokai Sea Farms, a shrimp aquaculture company. “First things first. We desperately need to get people back to work.”

But the bill’s supporters, including Hawaii’s labor unions and progressive activists, say the minimum wage should be increased even higher than the proposed $12 an hour, which would take effect in July 2022. They want it increased to $17 an hour by 2026 — a hike they say is also good for businesses because it boosts consumer spending.

“Our chronically low wages, when adjusted for the cost of living here, are creating an unsustainable economic situation in Hawaii,” Will Caron, president of Young Progressives Demanding Action, told lawmakers. “Without a dramatic change in economic policy to create a more equitable system that works for everyone, the working folks who make up the backbone of Hawaii’s economy and who are its social fabric will no longer be able to remain in Hawaii. As the working class is driven out of the archipelago or further into poverty, the economic base of the state will continue to shrink.”

In recent years there’s been increasing support from the state’s leading lawmakers and Democratic Party to pay workers a living wage, but the gap between that figure and what lawmakers have been willing to pass remains wide.

A single person with no children in Hawaii needed to earn $17.63 an hour last year to cover their most basic needs, according to estimates from the state Department of Business, Economic Development and Tourism.

Hawaii’s minimum wage also lags behind other states, even though it has the highest cost of living in the country. The next eight most expensive states, including California and New York, have all passed laws to raise their minimum wages to at least $15 an hour over the next five years, according to the Hawaii Appleseed Center for Law and Economic Justice, a public-policy organization focused on economic security and social justice issues. Meanwhile, the effect of inflation on Hawaii’s $10.10 minimum wage equates to full-time workers losing $1,000 annually.

Carrie Ann Shirota, a civil rights attorney, provided legislators with a proposition this year as they consider the bill: try living off of a $12-an-hour minimum wage and see whether it covers their families’ basic needs.

“Something tells me that such an experiment would show the absurdity of enacting a minimum wage that falls far below a living wage,” she wrote in testimony.