Minimum wage hike
to $7 is debated

Gov. Lingle thinks a tax break
will better serve isle workers

Two years after the state's minimum wage was raised to $6.25 an hour, lawmakers are considering a proposal that would boost the rate by 75 cents on July 1.

Star-Bulletin Legislature Database Star-Bulletin Legislature Guide (PDF, 1.9 MB) State Legislature: Bills & Hawaii Revised Statutes

While lawmakers and Gov. Linda Lingle both have pledged to help the lowest wage earners in Hawaii, the best way to do that is being debated.

State Labor Director Nelson Befitel said the administration does not oppose raising the minimum wage, but it would rather see lawmakers first pursue other options.

"What they're intending to address is cost-of-living issues," Befitel said yesterday after a House hearing committee hearing on three proposals aimed at raising wages in Hawaii.

"I think you need to take a look at the cost-of-living issue as a whole and look at the governor's package regarding raising the standard deduction and also the low-income housing initiatives," Befitel added.

House Labor Chairman Kirk Caldwell said he wanted to study all proposals.

"I agree with the governor, that we need to reach down to those that are just starting out in the workforce -- those who are making the lowest wages in our state -- and try to help them," said Caldwell (D, Manoa). "My gut feeling is that paying people for their hard work is probably one of the best ways to do it, it recognizes their contribution to society and earning the wage that they deserve.

"But I'm willing to look at the standard deduction and various forms of tax credits, too."

Raising the state's standard deduction for income tax filing -- among the lowest in the country -- could exempt thousands of the lowest wage earners from paying taxes altogether, supporters say.

Advocates of raising the minimum wage -- including labor unions who support an increase -- say it would provide more relief than raising the standard deduction by putting more money directly in workers' pockets.

"A minimum wage job should offer more than just an opportunity to work -- it should guarantee an opportunity to make a living from work," said Terry Lau, a representative of the Hawaii State AFL-CIO.

Opponents included businesses that said the move would place an undue burden on them by raising their overhead costs.

"Small businesses operating at the margins of profitability can ill afford to hire workers at artificially inflated wages mandated by the state and not increase the costs of consumer goods," said Bette Tatum, director of the National Federation of Independent Business-Hawaii, in written testimony to lawmakers. "Increasing the cost of goods is no way to help Hawaii's poorer families."