Coming with the new year is a hike of 75 cents in our state’s minimum wage. Hawaii is one of 14 states where workers will now see more in their paychecks.

Hawaii’s hourly wage will be $8.50. The Legislature increased the payment in 2014 — the first time the wage, which was then $7.25 an hour, had been raised since 2007.

It goes up again a year from now and in 2018 it is supposed to settle at $10.10.

As House Speaker Joe Souki put it at the time the bill passed, the wage hike was “long overdue.” Just two Republicans in the Legislature voted against the increase.

But come the new year, California and Massachusetts will be the first states to have a wage floor of $10 for all workers. Seattle, San Francisco and Los Angeles, meanwhile, are shifting toward $15, Time magazine reports.

buying power graph of Hawaii's minimum wage

In New York, where the wage will be $9 (with the exception of fast-food workers, who will make more), Gov. Andrew Cuomo has moved for a $15 wage for all state employees.

Meanwhile, a New York Times editorial has called on the U.S. Congress to pass a national minimum wage of $15. The newspaper pointed to the “Fight for $15” campaign backed by the Service Employees International Union, which represents nearly 1.9 million workers in over 100 occupations.

Janet Mason of the League of Women Voters of Hawaii was among those who pushed for the increase in Hawaii’s rate. She gives credit to lawmakers and stakeholders for accepting a “decent compromise” on the bill, especially regarding the tip credit — the amount businesses are allowed to deduct from the minimum wages of waiters, valets and other workers who depend on tips.

The tip credit went from 25 cents per hour to 50 cents in January 2015, and will now be 75 cents, provided that the combined amount an employee gets in wages and tips is at least $7 more than whatever the minimum wage is.

“But we can’t confuse this minimum wage with a living wage — they are not the same,” she said. “We can’t expect people to live on $8.50 an hour”

According to a recent report, the most expensive state is Hawaii, where it’s estimated that it takes $21.44 per hour to provide a living wage.

Mason wants the state to look at other support for “the working poor,” such as earned income tax credits, tax credits for child care, help with health insurance and eliminating the general excise tax on food.

A protester during the 2014 legislative session.
A protester during the 2014 legislative session. PF Bentley/Civil Beat

“It takes a package of aid — that’s what I’m looking for,” she said.

Mason also complained that Hawaii’s low wage is not tied to cost of living adjustments.

“By 2020 we may have to consider another increase in the minimum wage, to keep people in better alignment with the high cost of living,” she said.

If lawmakers do revisit the wage issue, it will almost certainly be contentious. The 2014 legislation and similar proposals in 2013 took loads of testimony from hundreds of individuals and groups.

They included Dwight Takamine, the labor department director under Gov. Neil Abercrombie, who said minimum wage workers “are falling further and further behind in their ability to make ends meet.”

Opponents included the Hawaii Food Industry Association, which argued that an increase “could put many retailers out of business, cost jobs for workers here in Hawaii and dramatically increase the price of food for everyone.”

Sherry Menor-McNamara, head of the Chamber of Commerce Hawaii, was pleased that the Legislature moved to increase the wage gradually and to understand the impact the higher cost would have on small businesses.

Menor-McNamara warned, however, that another increase would impact businesses negatively and could lead to cutting employee benefits and limiting new hires, for example.

The chamber represents more than 1,000 local businesses, and about 80 percent of its members are small businesses with fewer than 20 employees.

“We just never know when the next economic slowdown will come,” she said. “And, unlike other states, we are required to provide prepaid health-care costs.”

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