Hawaii lawmakers on Monday took a preliminary step toward increasing the minimum wage to $12 by July 2022.
The Senate Labor, Culture and the Arts Committee unanimously agreed to move forward with a measure to increase Hawaii’s minimum wage for the first time in four years. Hawaii’s wages last increased to the current $10.10 an hour in 2018.
Senate Bill 676 does not make any further step increases, and labor advocates also urged the lawmakers to raise the minimum wage to $17 in the next five years.
“This is the thank you that essential workers truly deserve,” Jun Shin, lobbying for the Hawaii Workers Center, told the panel of senators Monday.
This proposal comes a year after the pandemic stalled another measure that would have raised the minimum wage to $13 an hour by 2024 and also provided some tax relief to low income individuals.
That measure had agreement between legislative leaders, the governor and the business community. But this year, those same business groups are urging lawmakers to kill the minimum wage increase.
“We feel that the timing is just not right for us,” Victor Lim, legislative lead for the Hawaii Restaurant Association, told lawmakers.
The committee received hundreds of pages of testimony on the measure prior to a hearing Monday afternoon. Of those who testified, 181 supported the measure while 22 opposed it, according to Taniguchi.
Many in the business community raised concerns over increased costs for the wages as well as health mandates required by law. And local businesses would be bearing those added costs as many are still trying to recover from the COVID-19 pandemic.
A survey of more than 300 business by the Chamber of Commerce Hawaii found that revenues declined an average of 45% between 2019 and 2020. The chamber also found that about half of businesses surveyed were forced to reduce their workforce.
In 2020, local businesses relied on federal aid to stay afloat.
“We believe the proposal to increase the minimum wage during this pandemic sends the wrong message about efforts to support economic recovery during the greatest and most devastating economic recession in history,” Sherry Menor-McNamara, CEO of the Chamber of Commerce Hawaii, told lawmakers.
Russell Ryan, the chief finance officer of Highway Inn, was one of the business owners who opposes the wage increase. Highway Inn’s average pay for its restaurant workers is around $20 an hour, according to Ryan, who said that tips allow some servers to earn far above their base pay.
“Minimum wage is going to float this highly compensated group of employees,” Ryan said.
Pre-pandemic, Hawaii businesses had generally been able to handle cost increases when lawmakers increased minimum wages. The impact of wage increases on the labor market had also been minimal, a 2020 study by the state Department of Business, Economic Development and Tourism found.
SB 676 has support from a coalition of labor unions and other organizations that have been lobbying the Legislature for several years to adopt what they call a “living wage” of about $17 an hour, the amount of money DBEDT estimates someone needs to earn to be able to live in Hawaii.
The proposal’s chances of becoming law are still unclear. Similar wage measures in the House have not yet gained traction. Legislative leaders did not list raising minimum wage among their priorities, unlike the last two sessions.
The bill must next win approval from a joint meeting of the Senate Judiciary and Ways and Means Committees by Feb. 18.
Sen. Donovan Dela Cruz, chairman of the Senate Ways and Means Committee, couldn’t be reached for comment Monday afternoon.