Hawaii's minimum wage could go up for first time in seven years
HONOLULU (HawaiiNewsNow) - State lawmakers are trying to do what they couldn't last year. They want to raise the minimum wage, and hope to agree to pass one of two competing bills.
The Senate version calls for annual raises of 95 cents over three years-- while the House wants a 50 cent boost in 2015, and 75 cents annually through 2018, when it would reach 10 dollars. Small business owners are watching this debate closely because of the impact on their bottom line.
Tango Café owner and executive chef Goran Streng is closely watching the proposed minimum wage increases. He told Hawaii News Now, "Even though the minimum wage right now is only 7.25, my cost of that is really 14 dollars so if that increases to 10 dollars, it's going to be 20 dollars."
Streng says when you add in taxes and other costs of doing business, it's hardly chump change for his 20 minimum wage earners. He adds, "It will definitely increase the costs all around. My services will cost more. My cleaners, delivery guys, all the costs are going to increase for me. It's not just the wages."
According to the Senator Clayton Hee, sponsor of the Senate minimum wage bill, the Senate and House will likely consider the first bill passed. The Senate version would raises the wage to $10.10 over three years, without a tip credit right now.
Senator Hee says it's time to raise the minimum wage because "40 percent of the homeless are minimum wage earners. Over half of minimum wage earners are female. At 10.10, it's still only 21 thousand a year."
Hee says it's only fair to boost pay for minimum wage workers since costs keep climbing, without any increases in 7 years. In his words, "The average median rent on Oahu is 18 hundred a month, and the average median house is 685 thousand so we're not talking about a lot of money from that perspective. People will still struggle."
However, small business owners maintain that minimum wage workers who earn tips actually make more than hourly employees. The House version includes a one dollar tip credit for employers.
Restaurants like Tango, that operate on small margins, are wary of the potential ripple effect an increase could have. Chef Streng said, "it's definitely not going to create more jobs. I'm afraid it's going to slow down even more and people like me will be more hesitant."
The Senate's minimum wage bill will cross over to the House on Thursday. Similar bills died at this stage last year.
One sticking point was the tip credit, but Senator Hee said he feels good about its chances this legislative session.
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