House-Senate panel OKs
minimum wage hike

The proposal lacks pro-business
proposals wanted by the governor

House and Senate lawmakers have agreed on a proposal to raise the state's minimum wage by $1 over two years, but Gov. Linda Lingle wants lawmakers to take steps to help businesses before she commits to signing the bill.

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

Specifically, Lingle said, she would like to see lawmakers lower rates paid by employers into the state Unemployment Insurance Trust Fund and increase the "tip credit" to help ease the financial burden on restaurants and other service industry businesses that would be affected by the new wage.

Senate Bill 294, Conference Draft 1, which was approved yesterday by a joint House-Senate panel, includes neither of those proposals. The bill still must be approved by both chambers before going to Lingle for consideration.

"I would consider it if it comes up with an appropriate package of measures that recognize that it's a good time to get money back into the economy as well as try to help people with the minimum wage," Lingle said. "I want to give them every opportunity to match up an increase in minimum wage with money going back to businesses."

The 2005 session ends Thursday, and it is unlikely majority Democrats would take steps to amend bills to include the items being sought by the governor. Both items were contained in previous versions of the bill but ultimately removed as lawmakers sought compromise to gain support for the wage increases.

One of the key drafters of the proposal said he believes Lingle will allow the wage increases to go through.

"This year, everyone believes that they want to help those at the bottom of the economic ladder," said House Labor Chairman Kirk Caldwell (D, Manoa). "Probably the very best way you can help anyone is by paying the guys at the bottom a living wage. ... I think she's going to recognize that in the end."

The state's current hourly minimum of $6.25 was set in 2003. The new proposal would raise that to $6.75 on Jan. 1, with another 50-cent increase on Jan. 1, 2007.

The proposal was 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 in Hawaii.

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 25-cent tip credit -- the amount below minimum wage that employers can pay tipped workers such as servers.