Many of Hawaii’s teenagers hired for their first job or unskilled workers looking to be trained and promoted, are making minimum wage, which in Hawaii is $7.25 an hour.
Several of Hawaii’s 76 lawmakers wanted to increase that wage by more than $2 in two years, and in the House, representatives wanted to tie future increases to inflation. The governor asked lawmakers for a $1.50 per hour boost.
However, locally owned small businesses warned lawmakers that any increase could keep them from hiring inexperienced or untrained workers or force them to lay off workers. With the increase, not only would wages go up, but the costs of benefits would as well.
It appeared the minimum wage bill would pass after gaining momentum over the last several weeks in the House and Senate. However on Friday night, after lawmakers in both Houses could not agree on final language in the bill, the legislation died.
Lowell Kalapa, president of the Tax Foundation of Hawaii, testified this session against the proposed minimum wage increase.
“The minimum wage was never considered to be a ‘living wage,’ but rather an entry-level pay scale. It allowed workers who had no experience to be employed and to gain that important characteristic called ‘experience’ something that all employers seem to want to see if they are out shopping around for potential employees,” Kalapa said.
The idea of boosting the minimum wage, whether it be at the state or federal level, has “political appeal” because most people believe they should be earning more than what they are earning currently, Kalapa said.
“It is all about ego and self-esteem that we are all worth more than what we are currently being paid,” Kalapa said.
Kalapa and many business owners maintain a higher wage would mpact everyone negatively, even the direct beneficiaries, because the costs of goods will also go up.
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This of all years, simply alive with increased $ for EVERYONE, except the poor work stiff.
Good that this died. This was simply "feel good" legislation. It FEELS like the right thing to do to give the "poor" minimum wage worker a pay increase. But the discussion with the left ends when the question of how to pay for it is raised. There are only a few ways to pay for a minimum wage increase and each involves you and I paying for it. $2 an hour is roughly a 25% pay increase. Should the businesses lay-off 25% of their current minimum wage employees to pay for the increase? Which means you and I foot the bill through taxation. Should the businesses just eat it? Which means that you and I pay for it through price increases? I rarely agree with anything our law makers do…fortunately, they were unable to agree on exactly how to move this bad idea forward, and for this I am grateful! Unfortunately, I know that this will again "rear it's ugly head" in the near future.
Please note that the raise was in increments NOT all in one year. The smallest business person I spoke with said they will absorb costs through some price adjustment but readily agreed the employees deserve recognition for their hard work.
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