A bill moving through the state Legislature could increase Hawaii's minimum wage for the first time since 2007, but opinions are mixed as to whether elevating the wage floor would help or hinder Hawaii's economic recovery.
According to the state Department of Labor and Industrial Relations, the current $7.25 minimum wage is worth 84 cents less than when it was set five years ago due to inflation.
A minimum wage increase would help Hawaii workers recover lost purchasing power and encourage more spending that can contribute to the state's economic recovery, the Labor Department suggests.
That's not the way the Chamber of Commerce of Hawaii sees it, however.
The organization represents more than 1,000 businesses and approximately 80 percent of its members are small business owners with fewer than 20 employees. A mandated wage increase could mean the difference between continued existence or bankruptcy for some of these small establishments, said Chamber President and CEO Jim Tollefson.
Tollefson said he empathizes with the need to ensure workers can make ends meet, but added, "The enactment of a minimum wage increase at this time, however, will undermine efforts made to turn Hawaii's economy around."
The state House Committee on Labor and Public Employment heard testimony Tuesday on two measures to raise the minimum wage. Committee members ultimately passed out House Bill 1691, which bases the state's minimum wage on the federal poverty level for a family of two in Hawaii.
In the bill's current form, the minimum wage would increase 89 cents to $8.14 on Jan. 1, 2013. The bill also mandates the minimum wage be adjusted for inflation at the start of each fiscal year beginning July 1, 2013.
Committee Chairman Karl Rhoads, D-Kakaako-Downtown, recommended passing House Bill 1691 because it establishes a theoretical basis for setting the minimum wage and adjusting it for inflation.
"We just have a wage, and every once in a while we change it because we feel like inflation has eroded it," he said.
The discussion made it clear Hawaii's current minimum wage is under the federal poverty level, Rhoads pointed out. "This (bill) only gets you to the poverty line if you're making minimum wage in Hawaii," he said.
The committee followed Rhoads' recommendation to defer a bill that would have increased the minimum wage $1 to $8.25 by July 1, 2013.
Passage by the Labor Committee is the first of several hurdles the bill will have to clear this session for a minimum wage increase to go into effect during the next fiscal year.
