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It is really a huge detriment to at least half of our people that an increase to the state’s minimum wage was not passed this year. The Hawaii Senate felt it was important and feasible, but it did not move in the state House.
After reading testimony on this legislation one is compelled to consider how to make a wage increase work. The ALICE report of Aloha United Way makes it very clear that half of Hawaii residents are at the poverty level, or their financial situation is such that they are always “on the edge,” a paycheck away from not being able to meet bills.
Many are working multiple jobs to survive. The toll on these families is enormous, and it is no way to raise emotionally healthy children. These families will likely never be able to own a home.
The Center for American Progress noted that the disparity between the minimum wage and cost of living is so great that no worker in any state can afford a two-bedroom apartment. In Hawaii, with among the highest costs of living and highest costs of housing, a worker would be lucky to afford a studio apartment on a minimum wage.
Why could some of this not be used to support small businesses to meet the costs of an increase? Or in another year, make a legislative appropriation to “kick start” implementation of an increase as needed?The business community is concerned that some businesses cannot survive an increase in wages, with most saying this is particularly true due to the COVID-19 pandemic. The state has recently received support from the federal government in the new COVID-19 related subsidy bill of $1.9 trillion.
$17 By 2026
There needs to be a solution that meets the needs of businesses such as restaurants damaged by COVID-19 and Hawaii workers who have suffered way too long without a living wage. The state should pass this bill at the next opportunity, bringing minimum wages to $12 by July 2022 and raising it to $17 by 2026.
The state should also carefully design a process by which companies can file for a temporary subsidy related to COVID-19 to cover this additional cost. This process must offer enough for companies to pay their employees and be established in such a way that companies who do not need this subsidy cannot take advantage of the legislation.
The Center for American Progress also reports that Congress has historically raised the minimum wage in periods both of economic growth and recession and that 15 states have recently raised the minimum wage, including both “red and blue” states. The report states that if the minimum wage had been adjusted automatically over the past 80 years, it would be $20 per hour.
Positive results have been reported, including increases in productivity, decreases in employee turnover, fewer sick days and increases in consumer spending. And most minimum wage workers are women. These gains offset a large portion of the costs of an increase.
A finding of a fact sheet published by a Democratic congressional committee noted that increasing the minimum wage does not kill jobs. Instead, it reflects improvements in mental health and reduces the costs of hiring and training, which represent about 16% of an annual salary. It also stated that 60% of business executives support a $12 per hour wage by 2020, with future increases indexed to inflation.
This session of the Hawaii Legislature has seen lawmakers seriously considering developing a new stadium, which is not a critical need, and giving legislators a salary increase, which is also not critical. This is on top of the insanity of the rail, which we all will be paying taxes to support in the foreseeable future.
With the number of people pushing grocery carts full of their belongings, and tents popping up along our streets increasingly every day, we simply must do something about the minimum wage to allow our people to exist safely.
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