Hawaii’s minimum wage is woefully low in comparison with the state’s cost of living. And while the rise to $14 per hour on Monday surely helps, Hawaii’s many low-income workers struggle to meet the high cost of living — which will put pressure on the state to move wages higher more rapidly.
For perspective, the minimum wage in Washington state rose to $16.28 on Jan. 1, and it’s $16 in California. In Hawaii, after years of urging from workers, legislative leaders allowed the minimum hourly pay for most employees to rise to $12 per hour in 2022. The wage had been $10.10 hourly between 2018 and 2022.
Hawaii is not alone in this failure to protect workers from earning lamentably low wages for an hour’s work. Several states have no minimum wage at all; employers then are bound by the federal minimum wage, which is unconscionably low at $7.25 an hour.
As a point of comparison, financial planning website SmartAsset reported last year that Honolulu ties with Plano, Texas, as the city where minimum wage pays for the least, in comparison with the cost of living. Texas’ minimum wage is the bare minimum, $7.25. That’s certainly not what our state and county leaders should want for island workers.
Joe Biden ran for president urging a rise in the federal minimum wage to $15 per hour, but that proposal has been stymied in Congress since 2021. As an alternative, Biden has ordered that all federal employees or employees working on federal contracts earn a $15 per hour minimum. That wage floor should serve as a minimum here in Hawaii.
The lowest wages on the federal level are earned by service workers, contract firefighters, custodial workers, nursing assistants and laborers. It’s important to note that the largest benefits from a rise in the minimum wage go to typically less-well-paid groups: women, workers from underrepresented ethnicities and workers with disabilities.
Incidentally, Hawaii’s Senate Concurrent Resolution 117 was signed into law in 2023, requiring the state to study exemptions to the minimum wage law here that allow workers on small farms, coffee harvesters, domestic caretakers, “persons engaged in catching or harvesting fish,” and others to be paid even less than this minimum. That study was required to be presented to the incoming Legislature before it convenes Jan. 17, and should bolster the case for improved wages, across the board.
SCR 117 notes that, according to the National Low-Income Housing Coalition’s Out of Reach 2022 report, a minimum wage employee in Hawaii must work 123 hours per week (not a typo!) to afford a one-bedroom rental at market cost. Paying less than minimum wage in Hawaii, if allowed to continue, must be tied to evidence that such low-earning workers are able to meet living costs and have opportunities to move up an income ladder.
The Legislature should acknowledge the inadequacy of Hawaii’s pay for those at the lowest rungs to make ends meet, and consider making adjustments commensurate to a point determined as adequate for a single adult to meet basic needs. In 2020, the state Department of Business, Economic Development and Tourism found that pay point to be $18 an hour; inflation has obviously raised the target in 2024 and beyond.
Yes, raising the minimum wage for shoestring-budget and low-profit, labor-intensive businesses can have consequences. However, it’s also possible to structure the state’s tax code to provide credits based on higher wages paid by smaller businesses. Meanwhile, a raised minimum wage would also result in higher tax collections from individuals. Smart analysis can show the way forward.