Rep. Roy Takumi: Workers deserve (barely) decent pay
Over the past year, 25 states and the District of Columbia have raised their minimum wages. Unfortunately, Hawaii was not one of them.
Our minimum wage of $10.10 per hour (or $21,000 per year) is the lowest in the country (when adjusted for cost of living). This should be unacceptable to all of us.
The last minimum wage bill was passed by the Hawaii Legislature in 2014 and raised wages from $7.50 to $10.10 from 2015 to 2018. Since then, many bills on the minimum wage were introduced but came to nothing.
Hopefully this year will be different, but don’t hold your breath. As expected, the business community opposes any effort to raise workers’ wages saying that now is not the right time.
It’s not new. When the economy is doing well, the business community testifies that a raise is not necessary or necessary since companies pay more to attract workers.
When the economy is not doing well, the business community testifies that any increase will lead to layoffs and closures. In other words, there is never a good time. In fact, now more than ever we should raise the minimum wage.
It is particularly important and relevant to do so in the era of Covid-19. Hawaii is a tourism-dependent state with many residents working in low-paying jobs in the service industry. When the pandemic forced the state to close to tourists, the impact devastated that job market.
Even without the pandemic, many families in Hawaii are suffering. According to Living Wage Hawaii, $35,000 is needed for a single adult to meet basic needs; $80,000 is needed for a family of four, which means two working adults need to earn $19.32 an hour for their family to survive.
In other words, at $15 an hour, earning $31,000 a year is barely a living wage for a person.
A well-known Hawaiian restaurant claimed in 2014 that if the minimum wage increased, its plate of laulau would cost $5 more, making it unaffordable for people.
What really happened? From 2014 to 2018, the base increased by $1.30 when the minimum wage increased by $2.85.
Additionally, from 2011 to 2014, when the minimum wage remained at $7.70, the base increased by 70 cents. In other words, prices rose regardless of the minimum wage. And when the minimum wage went up, the laulau plate didn’t go up by $5.
Another argument is that unemployment will rise as businesses lay off or close. In January 2015, when the minimum wage went from $7.25 to $7.75, the unemployment rate was 4%. When the next hike was $8.50 in January 2016, the unemployment rate was 3.1%.
It then fell to 2.7% while the minimum wage rose to $9.25. And when the last hike to $10.10 took effect in January 2018, the unemployment rate was 2.3%.
Of course, this does not mean that when the minimum wage increases, unemployment always decreases, but it does mean that increasing the minimum wage does not always lead to layoffs and increased unemployment.
More importantly, rising wages raise the standard of living for women, kupuna, Native Hawaiians and Pacific Islanders, who disproportionately work in low-paying jobs.
Even if a bill were passed this year, it would not come into force until January 2023.
Research by the Economic Policy Institute concludes that nationally, 27% of the workforce in the United States would benefit from an increase in the federal minimum wage. But because they have higher salaries, only 18% of white men would benefit compared to 32% of white women (and 39% of black and Latina women).
The IPS also found that minimum wage increases would “unambiguously reduce net public assistance expenditures, particularly among workers likely to be affected by a federal minimum wage increase.”
We are in 2022 and four years have passed without an increase in our minimum wage. Even if a bill were passed this year, it wouldn’t come into force until January 2023. Let’s pass a minimum wage increase this year so that our most vulnerable workers get a well-deserved raise.