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Editorials
Friday, February 16, 2001Conditions are right
to raise minimum wageThe issue: Bills to increase the state minimum wage are before the Legislature.
LAST year the Legislature failed to pass an increase in the state minimum wage because the House and Senate failed to resolve their differences in conference. This year the Cayetano administration and the legislators are trying again.
The House Labor and Public Employment Committee has approved an increase in the minimum wage, currently $5.25 an hour, by 75 cents over three years. The Senate Labor Committee has approved an increase of 70 cents in one year.
In addition, the House is considering changes in the tip credit, which allows employers to pay employees who receive tips 20 cents less than the minimum wage. One change would make the credit a percentage of the minimum wage while another would limit the credit to workers whose hourly wages and tips exceed $9.43, the amount needed to sustain a family of four above the federal poverty level.
Last year this newspaper opposed an increase in the minimum wage on the ground that the state's economy, while starting to recover, was still fragile and an increase could hurt small businesses struggling to survive.
However, the state economy looks much stronger now. The unemployment rate, for the first time in years, is lower than the national rate -- an indication of improving job prospects. This is the right environment for an increase in the minimum wage because wages are being pushed up by the tight labor market. In this environment, a modest increase in the minimum wage would be no hardship on employers and would not be inflationary. Therefore we support it.
However, that support does not extend to a so-called living wage, also under consideration in the Legislature. This would require private companies that receive state contracts to pay employees at least $9.43 an hour, the minimum needed to sustain a four-member family above the poverty level.
The measure has passed the Senate Labor Committee. It would apply to businesses and nonprofit organizations that obtain contracts of at least $100,000.
The proposed living wage is considerably higher than the minimum wage, even if it is raised under one of the current proposals. As James Mak, a professor of economics at the University of Hawaii, testified, the living-wage proposal is "terrible" because it would affect only a small group of workers while increasing the cost of government contracts.
Existing laws add significantly to the cost of doing business in Hawaii. Further intrusions by government in the labor market with such plans as the living wage are unwarranted and unwise.
This proposal would have a particularly onerous effect because it would force taxpayers to pay more for the goods and services that government buys than the market requires. This is no way to reduce the cost of government.
State must obey Felix
FEDERAL Judge David Ezra held the state in contempt of court more than a year ago for providing inadequate services for children with mental disabilities but some state legislators have failed to grasp the implications of the contempt citation. If legislators refuse to provide enough funds to comply with Ezra's order, they will be inviting a more intrusive court order.
In response to a class-action lawsuit filed on behalf of student Jennifer Felix, Ezra found the state in contempt for its failure to meet the terms of a 1994 decree to which the state had consented. The judge gave Superintendent of Education Paul LeMahieu, Health Director Bruce Anderson and a court-appointed special master powers to override state laws, rules and collective-bargaining agreements to achieve compliance.
Ezra could have gone further and still may. He could divert federal money that the state of Hawaii receives for other programs to be spent on the effort to educate mentally disabled children, and he could authorize a special master to take over the state school system. Legislators have no choice but to abide by the order or face those more extreme consequences.
"If they refuse to abide by the federal law, they are going to find themselves in great difficulty," Ezra said in a court proceeding. "Does the Legislature want that?"
House Speaker Calvin Say says he and other lawmakers are concerned only about "how resources are spent for the student." He asked, "Is the student getting the services we're spending the money on?" Say should realize that question already has been litigated, and the answer is embodied in the court order.
"My blood is starting to boil when I hear that the judge is kind of blaming the Legislature," said Senate President Robert Bunda, revealing his lack of appreciation of Ezra's authority.
"We'd like to look at all the solutions available to us," Bunda continued. "It's not a game of chicken. It's doing what is right."
Doing what is right is adopting the only solution available to the Legislature: Abide by the court order. This is not a matter of legislative discretion.
Lawmakers are understandably reluctant to accept the fact that their constitutional authority over the state's finances is trumped in this case by the federal court. But that is the reality.
It may not be good policy for the federal government to force the states to fund programs such as special education, but the fact is that it can and does. And there is no recourse.
Published by Liberty Newspapers Limited PartnershipRupert E. Phillips, CEO
Frank Bridgewater, Acting Managing Editor
Diane Yukihiro Chang, Senior Editor & Editorial Page Editor
Frank Bridgewater & Michael Rovner, Assistant Managing Editors
A.A. Smyser, Contributing Editor
