A bill that would raise Hawaii’s minimum wage has reached the halfway point of its journey through the state Legislature.
House Bill 2510 successfully passed third reading in the House on Tuesday, and crossed over to the Senate on Thursday.
This is the second minimum wage measure to cross over into the opposite chamber this session, after Senate Bill 2018 raced through the Senate and was sent to the House in January.
In its current state, HB 2510 would increase the minimum hourly wage incrementally, raising it from the current $10.10 to $13 beginning in 2023, and then hiking it by a dollar per year until reaching $18 in 2028. This slightly accelerates the pay-hike schedule in a previous draft of the bill, which would raise it to $11 in 2023 and continuing year-by-year until it reached $18 in 2030.
By comparison, SB 2018 would increase the minimum wage to $18 by 2026 in only three increments.
HB 2510 also proposes changes in the minimum hourly wages of tipped employees. Currently, tipped employees are allowed to be paid $0.75 less than the minimum wage so long as their wages and tips total at least $7 more than the minimum wage.
The latest draft of the House bill will allow tipped employees to be paid $1.50 less than the minimum wage in 2023 and increase that margin by 25 cents each year until 2028, when the margin will be $2.75. The requirement that tipped employees make at least $7 more than minimum wage remains constant throughout.
During its passage through the House, HB 2510 received some support from public testifiers. Kona Councilwoman Rebecca Villegas, writing for the County Council, supported the bill, noting that an estimated 59% of Hawaii households are considered Asset Limited, Income Constrained and Employed in the wake of the pandemic.
However, during a March 1 Finance Committee meeting, the bill received more opposition than support. While some of the opposition was from the perspective of business owners worried about the increased labor costs — Victor Lim, legislative lead of the Hawaii Restaurant Association, wrote that minimum wage jobs are meant for those just entering the work force and is not intended to provide a “living wage” — most were concerned that the bill does not do enough.
“HB 2510 would only get workers to $18 an hour by 2030 — far too slow!” wrote the Hawaii Workers Center, referring to the previous draft of the bill and its 2030 end date. “By 2026, HB 2510 would put workers at $14 an hour, which is almost the exact equivalent of where workers were left in 2018 with $10.10— well short of a living wage.”
The center and many other testifiers urged instead the passage of SB 2018 because of its much faster pay escalation.
A poll by the Chamber of Commerce Hawaii of its member businesses found that more respondents favored a faster wage increase. Of 207 respondents, 34% said they would support the timetable set by SB 2018, compared to only 15% who would support HB 2510’s schedule.
On the other hand, 27% of respondents favored capping the wage increase at $15 an hour, and 25% did not support a wage increase at all.
Hawaii Island Chamber of Commerce Executive Officer Miles Yoshioka said he wasn’t sure why businesses would favor a faster transition, but added that every business’ situation in the wake of the pandemic is different.
“Businesses are still trying to come back,” Yoshioka said. “Nothing’s easy for anyone right now, and doing a wage increase would just be something extra on that.”
That said, the majority of respondents to the state chamber’s survey said that, regardless of the wage increase schedule, they would be able to remain in business. Fifty-six percent of respondents believed they would not have to reduce their staff at all if the minimum wage rose to $18 an hour by 2030, and 49% believed the same if the wage rose to $18 by 2026.
SB 2018 has not moved at all since Jan. 31, when it passed first reading in the House. However, the bill is still considerably ahead of schedule, as it crossed over to the House more than a month before the deadline.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
