After years of false starts and aborted attempts, 2022 may be the year the Legislature finally passes a minimum wage hike, said a state lawmaker from the Big Island.
Prominent among the legislative priorities announced at the start of the legislative session Wednesday was the commitment to incrementally increase the hourly minimum wage — currently at $10.10 — year-by-year until it reaches $18 an hour, which would be the highest in the nation.
This proposal is similar to previous minimum wage bills introduced over the last several years.
“The whole minimum wage issue was going to be addressed in 2020, but then the pandemic started,” said Hilo Rep. Richard Onishi, who is chair of the House Committee on Labor and Tourism. “And then we couldn’t last year because people were struggling with that so much. It wasn’t the appropriate time.”
This year, however, Onishi believes things can and should be different.
This year, the minimum wage increase will be part of a larger package aimed at assisting ALICE families, Onishi said, using an acronym for “Asset Limited, Income Constrained and Employed.”
ALICE families accounted for more than 40% of the state population prepandemic, he said, but in 2022 that number is 60% or more.
While Onishi acknowledged that minimum wage increases will always be unpopular among business owners, he said that eventually the state will have to bite the bullet and press on anyway.
“For the most part, businesses don’t believe there’s any good time to increase the minimum wage,” Onishi said.
But, he added, the shortage of workers during the pandemic already has forced many businesses to increase their wages to entice people back to work, so any legally mandated increase might not affect them anyway.
Carl Bonham, director of the University of Hawaii Economic Research Organization, agreed, saying during a livestreamed interview Wednesday that he expects minimum wage legislation to pass this year because of the already elevated wages.
Even among some of the lowest-paying jobs in the state, such as waiters or dishwashers, Bonham said many are already making more than $10.10 an hour.
He also challenged the notion that minimum wage hikes force businesses to eliminate jobs.
“One of the reasons you tend not to see job losses when you see increases in minimum wage … is because businesses are able to pass along the costs,” Bonham said. “Because it’s not just hitting a single business, it’s hitting every one, so all food service, all restaurants, all retail are subject to the same cost effect.”
Because the cost of labor is not the sole determining factor for the cost of goods and services, Bonham said that a 10% increase in hourly wages will not lead to a 10% increase in the cost to consumers.
“If your plate lunch goes up by 25 or 50 cents, you don’t start eating at home,” Bonham said.
Bonham said the minimum wage increase might help with the state’s unemployment rate, which appears to be declining, but not necessarily for the most obvious reasons.
“We still have … about 38,000 people who are counted as unemployed in the state, despite the reports of (businesses) being unable to hire,” Bonham said. “Some of what’s going on is that the labor force has shrunk by … 26,000 people.”
Since the beginning of the pandemic, when Hawaii’s unemployment rate skyrocketed to more than 20%, Bonham said a significant number of people have left the state. On top of that, he estimated that more people than normal — 6,000 to 7,000, he said — have retired since the pandemic.
Because of this shrinking of the labor force, Bonham said it appears on paper that the unemployment rate is diminishing, but the reality is simply that there are fewer people who can be employed at all.
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
