Chamber warns of ‘unintended consequences’ of minimum wage hike
Hawaii workers could soon see the first raise in the minimum wage in six years.
Gov. Neil Abercrombie has proposed raising the wage from $7.25 an hour, which matches the federal level, to $8.75 in 2014. The approximately 20 percent increase would be the first time the state has touched the minimum wage since 2007. The move would provide a full-time minimum wage earner with an extra $60 a week before taxes.
“I would really appreciate that,” said Treven Mukai of Hilo. “I won’t have to struggle so hard at the end of the month,” he said.
Several lawmakers have also signed on to an increase.
Five bills have been introduced to raise the minimum wage.
Many also seek to meet the $8.75 mark in July 2014 with a wage of $8.25 taking effect this summer.
A few would tie the minimum wage to the consumer price index afterward, which would essentially make it rise with inflation.
Vaughn Cook, Hawaii Island Chamber of Commerce president, said lawmakers should be wary of mandating an increase. Cook said many businesses are still struggling and that raising the minimum wage could cause them to hire fewer people.
“There is unintended consequences,” he said. “We would encourage the Legislature to not do something that would harm or impede economic growth,” Cook said.
Hawaii had 15,000 workers earning at or below the minimum wage in 2011, according to the Bureau of Labor Statistics. Some employees, including those who make tips, can make slightly less than the minimum wage.
The percentage of hourly workers in the state earning the minimum wage or less increased from a little over 1 percent in 2007 to 4.7 percent in 2011.
Pam Owens, co-owner of Pineapples restaurant in Hilo, said she thinks an increase would be fair, though it would hurt her bottom line.
“That’s always a concern,” she said. “I think it’s fair to the workers so we just have to re-budget and make it work in another way.”
Servers are the only employees at the restaurant who make minimum wage, she said, though such a large increase would likely mean a raise for everyone.
Maria Short, owner of the Short N Sweet bakery, said she is also supportive of raising the minimum wage even though her business is facing higher costs across the board.
“[Six] years without an increase is a long time,” she said. “Everyone is going to have to make due.”
The minimum wage in Hawaii, known for its high cost of living, has typically stayed at least slightly ahead of the federal rate.
Currently, Hawaii is one of 22 states at the same level as the federal minimum wage. Only two states — Washington and Oregon — have minimum wage rates higher than $8.75.
Rep. Denny Coffman, D-Kailua-Kona, Ocean View, is a co-sponsor of one of the bills to increase the minimum wage.
“I think we have a problem in the state,” he said. “We have so many people in the service section who are at the minimum wage level.
“We need to start moving it up.”