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Editorials
Thursday, January 27, 2000Wrong time to raise
the minimum wageThe reduction in the state unemployment rate to its lowest point in six years is a sign of economic recovery that reinforces other favorable trends. The rate for December was 4.4 percent, compared with 5.4 percent in December 1998. Last month's rate was the lowest since a 4 percent rate in December 1993. Preliminary figures indicate that the unemployment rate for all of 1999 was 5.5 percent, also the lowest in six years.The issue: Governor Cayetano has proposed raising the state minimum wage.
This of course doesn't mean that the weakness in the economy has ended, only that a recovery has begun.
Thousands of jobs have been lost, hundreds of small businesses -- and some big ones -- have closed over the past decade. There has been an exodus of Hawaii residents to the mainland in search of jobs, apparently contributing to a dip in the state population. There is still a long way to go before people here will feel prosperous again.
That is why the Legislature must continue to exert restraint in spending until revenues pick up and to try to find ways to help private businesses survive.
One thing the Legislature shouldn't do is approve Governor Cayetano's proposal to increase the minimum wage.
The governor's rationale is that 3,000 families will be moved off the welfare rolls in accordance with changes in the federal welfare law. If they obtain jobs at the current minimum wage, he says, their incomes will remain below the poverty level.
If the state wants to provide help to these people, it shouldn't force the private sector to do so. Making the private sector foot the bill is no way to boost the economy. The effect is like a tax increase.
The government could use the earned income tax credit, which was designed for this purpose, or another program of that sort.
Raising the minimum wage can be justified when the economy is strong and subject to inflationary pressures that force up the cost of living.
This is not the current situation in Hawaii. Inflation has been low. Many small businesses that pay the minimum wage or close to it are still struggling to survive and would find it difficult to raise their employees' pay.
The result might be that fewer workers would be hired or some laid off -- hardly the desired result of the proposal.
Moreover, many minimum-wage workers are not heads of households but teen-agers who live with their parents and use their earnings for nonessential purchases. They don't need a raise.
Periodic increases in the minimum wage are inevitable to adjust for inflation. With Hawaii beginning to recover from recession, this is not a good time for a raise.
Jump in illegal sales
of cigarettes to minorsSTATE-sponsored sting operations consisting of minors trying to buy cigarettes at stores have succeeded in discouraging such illegal sales, but the program could be more successful. The threat of fines should convince store owners of the value of educating their clerks about the precautions to take.
The Honolulu Police Department and the state Health Department began the stings four years ago, using youths aged 15 to 17. In the first year, 44 percent of Hawaii stores targeted by the youths sold cigarettes to them. In 1998, that percentage fell to 15 percent. However, the percentage rose to 25 percent overall last year -- matching the national average -- and to an alarming 37.7 percent in December.
Sales apparently increased after youths began carrying identification cards with their dates of birth and showing them to retail clerks who asked.
Presented with the cards, many of the clerks assumed the youths were old enough to buy cigarettes without bothering to look at the dates of birth and doing the math.
Elaine Wilson, chief of the state Alcohol and Drug Abuse Division, said the clerks must be assuming that no one would show identification so readily if it wasn't valid. "I do think they know how to do the math," she said.
To deal with the problem, retailers now are being asked to post signs or make labels that say, "No sale if born after today, 1982."
Juveniles are used in two sting operations, one administered by the Federal Drug Administration and the other by police and state health officials.
Under the federal program, store owners who have been warned after a first violation face fines ranging from $250 for a second violation to $10,000 for a fifth. The state law provides for $500 fines against the clerks.
Each of the 1,600 stores in Hawaii that sell cigarettes must be inspected at least once a year. That limited scope may have made the threat of fines too remote to induce some store owners to take adequate measures to prevent cigarette sales to minors.
The success of the stings should be reason enough to use some of the revenue from fines to expand the program.
Published by Liberty Newspapers Limited PartnershipRupert E. Phillips, CEO
John M. Flanagan, Editor & Publisher
David Shapiro, Managing Editor
Diane Yukihiro Chang, Senior Editor & Editorial Page Editor
Frank Bridgewater & Michael Rovner, Assistant Managing Editors
A.A. Smyser, Contributing Editor
