HONOLULU — Hawaii’s minimum wage would rise by almost $3 in three years under a bill the state Senate advanced Friday.
The minimum wage has been $7.25 an hour for the past seven years. The bill would raise that by 95 cents a year until it reaches $10.10 an hour in 2017.
The Senate Ways and Means Committee sent the measure ahead to the Senate floor, but not before removing provisions that workers and labor advocates had sought. Amended Senate Bill 2609 will not repeal the tax credit for employers and will not yoke future minimum wage increases to the Consumer Price Index.
A full-time minimum wage worker in Hawaii earns about $15,000 a year. The state’s cost of living and housing prices are among the highest in the nation.
“We know that a living wage in Hawaii is close to $30 an hour,” Sen. Suzanne Chun Oakland, a Democrat representing Honolulu, said during the committee hearing. “This is not even close to that.”
Raising the minimum wage has broad appeal in the state legislature, in part because of President Barack Obama’s executive order to raise the minimum wage for federal contract workers from $7.25 to $10.10 in 2015. But in Hawaii, where about one job in five is in leisure and hospitality, the potential effects on food and service jobs are a point of contention.
“People that aren’t in business always come to us and tell us what wages should be and what working conditions should be,” Sen. Sam Slom, the Senate’s lone Republican, representing Hawaii Kai, said in the hearing. “My suggestion always is that those folks, as well-intended as they are, should start their own businesses. … They would soon learn the costs of doing business and the very narrow margins of profit, especially here in Hawaii.”
For the Senate to uncouple wages from the cost of living was a boon for employers, said George Sziget, the president and CEO of the Hawaii Lodging &Tourism Association, because those raises create uncertainty for employers each year.
“The dollar amount might still be high” in the Senate bill, Sziget said. “Hawaii is dominated by small businesses of four, five employees. Going from seven-and-a-quarter to 10 is still going to be a challenge for them.”
Repealing Hawaii’s 25-cent tip credit was a goal for supporters of the Senate bill that now looks unlikely. A tip credit allows an employer to count a given amount of workers’ tips toward their hourly wage, in effect reducing the worker’s pay by that amount.
Sen. Clayton Hee, a Democrat representing Waialua and Koolauloa, who introduced the bill, said in an interview that he sought to repeal the tip credit because he views it as fundamentally unfair.
“It adds up to a lot of money,” Hee said. “The money is being made off the backs of the working poor. If the legislature wishes to provide a tax credit to restaurants, they should do it straight up. If that is the prevailing sentiment, it would be paid by all taxpayers and not just the minimum wage earners.”