After a hearing held March 12, the House Committee on Labor passed SB 331, which would increase Hawaiʻi’s minimum wage.
The bill originally called for the wage to be raised to $9.25 in 2016 (with smaller increases until then) and then automatically raised in proportion to the consumer price index in following years. But the committee amended the bill before passage, lowering that figure to $9 in 2017 (with 50-cent increases from the current $7.25 beginning in 2014). The committee also deleted the section regarding automatic increases.
All government agencies and offices represented at the hearing supported the original increase. But the Chamber of Commerce, as well as several individual business owners, gave testimony in opposition.
One controversial issue centered around the tip credit, which allows employers to pay less than minimum wage to tipped employees. The current tip credit is 25 cents in Hawaiʻi.
Several businesses contended that their tipped employees make more than management staff, and that increasing the minimum wage without increasing the tip credit would force employers to take money away from kitchen workers or long-time employees they try to pay at a higher rate. “If we have to start higher, we have to shift our entire scale,” said Monica Toguchi of Highway Inn.
But Jack Temple of the National Employment Law Project said it’s a misconception that tipped workers generally live well. “Tipped workers experience poverty at three times the rate as non-tipped workers,” he said. He also noted that the 10 states that automatically raise their minimum wage every year see a small stimulus in the economy; in those states that don’t, minimum-wage workers lose purchasing power because of inflation.