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Thursday, May 5, 2005



Lingle not sold
on wage increase

Legislators approve a bill raising
minimum hourly pay to $6.75

Gov. Linda Lingle says she still is reviewing a proposal to raise the state's minimum wage by $1 in the next two years.

Lingle had urged lawmakers to consider other measures to help businesses that would be affected by the wage increase, but lawmakers -- who wrap up the 2005 regular session today -- passed no such proposals.

"I'm going to have to take a good look at it in relation to the other issues that did or did not pass this session," Lingle said yesterday. "Many of these issues are related."

Lawmakers approved Senate Bill 294, Conference Draft 1, late Tuesday by a vote of 20-5 in the Senate and 48-3 in the House.

The proposal would increase the state's hourly minimum wage by 50 cents, to $6.75, beginning Jan. 1, with another 50-cent increase the following year.

Earlier versions of the bill included business-friendly measures supported by Lingle that ultimately were stripped by House and Senate negotiators. Those measures included increasing the 25-cent tip credit -- the amount below minimum wage employers can pay tipped workers -- and a reduction in the rates that businesses pay into the state's Unemployment Insurance Trust Fund.

Lingle called lawmakers' resistance to lowering those rates "the most unexplainable action of the session. ... (It) would've helped the workers, would've helped businesses and wouldn't have cost the state anything."

She noted that the fund balance is at $400 million, which would be enough to pay for the state's annual unemployment costs for at least three years.

House Labor Chairman Kirk Caldwell said he is sympathetic to the plight of businesses but added that if the economy goes south, businesses could face higher rates in the future.

"You don't want to be faced with a difficult economic situation and be asking business to pay more into the fund because you gave them more money when times were good," said Caldwell (D, Manoa).

"Everyone can use more cash at any time. My concern is, if we do that at a time when they don't need it as much, what happens in 2008? ... If someone can tell me in 2008 that the economy is going to be even stronger, my fear would be less."

Small businesses have opposed the measure, saying many of their employees already make more than the minimum wage and that increasing the wages of the lowest earners could force them to raise salaries across the board and, in turn, impel them to close down.

Restaurants and other service industries have opposed any wage hike that does not include an increase in the tip credit.

"I think our restaurants deserve more help," said Rep. Corrine Ching (R, Nuuanu- Liliha), who supported the bill but with reservations.

The proposal to increase the minimum wage has been strongly supported by labor unions, who say many of the state's lowest wage earners have to work two and sometimes three minimum-wage jobs to earn decent wages.

As the debate on minimum wage dragged late into Tuesday night, Caldwell recognized one such worker in the House gallery: Sandi Chong, a 50-year Ewa resident who has worked for Consolidated Amusement Co. for about 20 years.

He said Chong received a raise six months ago and now earns $6.60 per hour -- about $100 a week in take-home pay -- and is among those who would benefit from an increase in the weekly minimum.

"We're not talking about entry-level people sometimes, or young kids," Caldwell said. "We're talking about people who have to support members of their family, are middle-aged and working very hard."

Office of the Governor
www.hawaii.gov/gov/


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