The House Labor and Public Employment Committee on Tuesday approved a measure that would increase the current rate of $5.25 an hour to $5.75 by Jan. 1, 1999 and $6.15 by Jan. 1, 2000.
"Obviously, minimum-wage workers need more money to spend," said committee chairman Rep. Noboru Yonamine. "The more the workers get into their pockets, the more they will be spending" in Hawaii's economy.
In a labor committee hearing last week, the measure received vocal opposition from Hawaii's business community, which says that it would increase costs for employers at a time when many are cutting back.
With Hawaii's economy in its fifth consecutive year of job losses, a higher minimum wage will mean further job losses, they said. Many said the bill would especially hurt small businesses and restaurants that rely heavily on entry level workers.
Bette Tatum, state director of the National Federation of Independent Business, said raising the minimum wage would hurt the people that it's intended to benefit: the entry-level worker. Tatum said many low-skilled workers would be priced out of their jobs.
"One or two things then can only happen, the employer must increase the cost of goods and services to the public or it must cut back on hours or the number of employees," Tim Lyons, executive vice president of the Hawaii Business League. "It's a vicious cycle."
The measure was supported by local union leaders and social workers. Gary Rodrigues, president of the AFL-CIO, testified that the higher minimum wage will ensure wage equity and provide relief from Hawaii's high costs.
Debbie Shimizu, executive director of the National Association of Social Workers' Hawaii chapter, said a higher minimum wage would encourage those who previously received welfare benefits from falling back on welfare.
The plan to increase Hawaii's minimum wage comes after the federal government has increased the nation's minimum wage. The Clinton administration in October increased the federal rate from $4.25 an hour to $4.75 an hour. On Sept. 1, the national minimum wage will rise to $5.15 an hour.
Yonamine (D, Pearl City) said his measure initially proposed increasing the minimum wage on Jan. 1, 1998, but pushed back the date a year to address employers' concerns. He said the increase affects about 10 percent of all full-time workers statewide and he noted that some employers have told him they could adjust to the higher entry-level wages if they were given time to plan for the increase.
The House bill next goes to the Finance committee for a hearing.
Sen. Suzanne Chun Oakland, co-chair of the Senate Human Resource Committee, said that a similar minimum-age hike bill is now in the Senate. But she said her committee is reluctant to hold hearings on the bill given the difficulties that many small businesses now are facing.