Hawaii minimum wage bill advances despite criticisms

A desire by state House leadership this year to raise Hawaii’s minimum wage took its first step forward as a bill was advanced Tuesday by a committee at the Legislature.

But the measure, introduced by 40 of 51 House members, overwhelmingly drew negative comments or opposition from many advocates of both employers and employees.

The House Committee on Labor and Tourism voted 6-2 to pass House Bill 2510 to the House Finance Committee for more consideration.

The bill was criticized in many public comments alternately as too strong or too weak.

Committee members, however, mostly felt HB 2510 provides a comprehensive mix of changes to achieve what was raised as a top priority at the start of this year’s legislative session by House Speaker Scott Saiki, who introduced the bill with 39 colleagues.

“I think we’re tackling a very tough issue in a very responsible way,” committee member and Majority Leader Rep. Della Au Belatti (D, Moiliili-Makiki- Tantalus) said just before the vote.

HB 2510 would raise Hawaii’s hourly minimum wage, which is $10.10, to $11 in January and then by $1 a year until reaching $18 in 2030.

The bill also would increase the tip credit over the same period, allowing employers to pay less than the minimum wage to employees who earn tips.

Several tax changes also are proposed in the bill that would make the state earned income tax credit refundable and permanent, increase a refundable food/excise tax credit, allow previously claimed nonrefundable credits to be carried forward, and alter a household and dependent care tax credit.

The committee received 192 pages of written testimony on the bill.

About 90 individuals or organizations opposed the measure. Another roughly 50 testifiers offered comments that included business advocates wanting a smaller hike and worker advocates wanting a faster increase to $18 an hour consistent with a bill passed in January by the full Senate in a 24-1 vote.

Senate Bill 2018 would boost the minimum hourly wage to $12 on Oct. 1; then to $15 on Jan. 1, 2024; and finally to $18 on Jan. 1, 2026.

Another bill aiming to raise the minimum wage, House Bill 1771, was introduced by the Progressive Legislative Caucus and proposes five steps reaching $18 in 2027. This bill has yet to be scheduled for a hearing.

On Tuesday, hardly any testifiers expressed outright support for HB 2510.

Lauren Zirbel, executive director of Hawaii Food Industry Association, said the bill represented a “fair and thoughtful” effort. But she urged the committee to amend the measure so that the increase ends in 2027 at $15 an hour.

Pamela Tumpap, president of the Maui Chamber of Commerce, also advocated for increases to go no higher than $15 an hour.

“A minimum wage is not a living wage,” she said. “A minimum wage is a starting wage.”

Trevor Abarzua, associate vice president of business advocacy and government affairs for the Chamber of Commerce Hawaii, said most of the organization’s members can support a $15 minimum wage, and noted that this figure was favored by most respondents — 49% — in a recent Honolulu Star-Advertiser Hawaii Poll of voters statewide.

Abarzua also told the committee that chamber members surveyed in January responded negatively to the minimum rising to $18 an hour within an unspecified time frame, with 66% of respondents saying they would react to such a change by cutting staff while 27% would lay off half their workforce and 32% would cease business.

Other organizations expressing concerns or opposition over HB 2510 included the Hawaii Restaurant Association, Grassroot Institute of Hawaii, Retail Merchants of Hawaii and National Federation of Independent Business.

Advocates for workers also opposed the bill.

“The minimum wage increase proposed by this bill will help people, but not nearly quickly enough,” Gavin Thornton, executive director of the Hawaii Appleseed Center for Law and Economic Justice, said at the hearing.

Thornton advocated for an immediate increase of $2 or $3 an hour followed by smaller step-ups reaching $18 by 2026.

Carolyn Eaton told the committee that Hawaii’s hourly minimum wage, which was last increased in 2018, should rise to $18 by 2026 as called for in the Senate bill.

“Hardworking families and individuals deserve this action after so many years without a meaningful raise,” she said.

Even some of the support for HB 2510 was derisive. “Let’s just say I kind of sort of support it, as it’s acceptably awful,” Dave Kisor said in written testimony.

Perhaps the strongest positive comment on the bill came from Carl Bonham, executive director of the University of Hawaii Economic Research Organization.

Bonham said items to like in the bill include changes to the food excise tax credit and earned income tax credit along with a relatively gradual minimum wage increase that allows time for businesses to adjust and plan for rising costs.

“Contrary to the views of opponents and proponents, raising the minimum wage incrementally will neither destroy large numbers of jobs and businesses, nor will it dramatically improve the living standards of low-income workers,” he said in written testimony. “The truth lies somewhere in the middle, and suggests that a gradual approach is warranted.”

Rep. Richard Onishi (D, South Hilo-Keaau-Honuapo) recommended several amendments to the bill as committee chairman, which were approved, including automatic changes to the minimum wage after 2030 by linking them to Hawaii’s median wage growth rate.

The two committee members who voted against the bill were Reps. Sean Quinlan (D, Waialua-­Kahuku-Waiahole) and Val Okimoto (R, Mililani-­Mililani Mauka-Waipio Acres).

Said Quinlan, “I love every single part of this bill except for the $18, and as a former small-business owner, unfortunately I must vote no on this measure.”

Okimoto said she agreed with much of the bill but that the increase was too much given business community concerns.

“If we continue to do this, it will be detrimental to our local businesses through jobs, or passed on to the consumers,” she said.

Rep. Dale Kobayashi (D, Manoa-Punahou-Moiliili) described the bill as a compromise he can support.

Kobayashi noted that lawmakers couldn’t pass a minimum wage increase to $15 previously despite it not being an election year like this year, and he wishes that the measure being advanced would raise the minimum wage more rapidly.

“We have an opportunity in an election year to get $18 in an imperfect way,” he said. “Maybe there is a better way to do this for the people of Hawaii to be able to afford to live here. So far, from what’s been put before me as a choice and an option to support, this is probably as good as it gets.”