A bill in the state House of Representatives that would increase the minimum wage cleared a committee hurdle Tuesday.
The House Labor and Tourism Committee, chaired by Rep. Richard Onishi of Hilo, passed House Bill 2510 with amendments by a 6-2 vote. The “no” votes were cast by Sens. Sean Quinlan, an Oahu Democrat, and Val Okimoto, an Oahu Republican.
The bill, if passed, would raise the state’s minimum wage of $10.10 per hour to $11 an hour on Jan. 1, 2023, with $1 per hour raises yearly until the minimum wage reaches $18 on Jan. 1, 2013.
A minimum wage hike has been a hot-button issue this year, with 40 House members signing on to the bill introduced by Speaker Scott Saiki. Co-signers include Onishi and fellow Big Island Reps. Greggor Ilagan, Nicole Lowen, David Tarnas and Chris Todd.
The Senate passed its own minimum wage bill unamended and forwarded it to the House, where it has received its first favorable floor vote. SB 2018 would raise the minimum wage to $12 an hour on Oct. 1, $15 an hour on Jan. 1, 2024, and $18 an hour on Jan. 1, 2026.
“The Senate bill only looks at the minimum wage. Our bill takes a different approach,” Onishi said. “It’s looking at how we’re going to help families. The minimum wage is one component. We believe the research shows that a more gradual increase to the minimum wage has very little effect on the economy and on businesses versus steep increases in the minimum wage.”
Other provisions in the House version would increase food tax credits for lower-income people and provide a permanent and refundable earned income tax credit for qualified taxpayers.
Several business and industry groups said they favor a minimum wage increase to $15 an hour by 2027, but oppose a hike to $18.
Trevor Abarzua of the Chamber of Commerce of Hawaii said his group appreciates that the House bill takes a “broader approach in addressing the needs of Hawaii’s working families.”
“Now, $18 is a concern, based on a survey we did of our members where about 450 businesses participated, with over 50% of those businesses having 25 employees or less,” Abarzua said. “Now, some of the results were shocking, where 66% of businesses said they would need to cut staff if the minimum wage was increased to $18. Twenty-seven percent of businesses said they would need to lay off half of their workforce and half of their staff if they went up to $18, and 32% of those businesses said they would need to shut down completely if minimum wage was increased to $18.”
At the opposite end of the spectrum, Gavin Thornton of the Hawaii Appleseed Center for Law and Economic Justice testified that the bill doesn’t do enough to help Hawaii’s wage earners.
“I don’t understand how it is that we can value people and their work so little that, at minimum, we can’t pay people who are working 40 hours a week enough to meet their most basic needs,” Thornton said. “… People have been waiting four years for a minimum wage increase; they’ve been waiting decades for an income that’s sufficient to live on. For the past four years, inflation has eaten away at what minimum wage workers are earning. They’re effectively earning $2,000 less today than they were in 2018.”
Nicole Woo, of the Children’s Advocacy Action Network, testified a provision in the bill would unintentionally eliminate tax credits to working parents paying for child care.
“Currently, the tax credit is up to $2,400 for a single parent or $4,800 per couple, and it provides a credit of between 15% and 25% of their child-care costs,” Woo said. “We have some of the most expensive child-care costs in the nation, so we are really flummoxed and don’t understand why a bill that’s supposed to be helping families actually would raise taxes on a whole bunch of them.”
Woo urged the committee to either amend or defer the bill, which she said contains “too many flaws.”
One amendment made by Onishi would strike the portion Woo referred to. He also changed the effective date of the legislation to Dec. 25, 2040, to keep it alive for further discussion.
The amended bill now goes to the full House for a floor vote and has a referral to the Finance Committee, which hasn’t yet scheduled a hearing.
Discussion by committee members during the vote was as contentious as the testimony they heard.
“Although I appreciate much of the bill … especially with the tax credits and how we can help local people, I cannot in good conscience, at this time, support this type of increase in minimum wage,” Okimoto said. “I think the testimonies that were shared by our local business community, it goes along with what I’ve been hearing in my community.”
Rep. Dale Kobayashi, an Oahu Democrat, said he wishes lawmakers could increase the minimum wage “in a more rapid way than a dollar a year until 2030.”
“But, in a nonelection year, we were unable to pass $15 … if you can remember that,” he said. “So now, we have the opportunity in an election year to get $18 in an imperfect way. Thank God for small favors. Maybe there’s 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.”
Email John Burnett at jburnett@hawaiitribune-herald.com.
