LIHUE — Hawaii’s minimum wage jumped from $9.25 to $10.10 per hour starting the first day of the new year.
Entry-level employees will benefit most from the 85-cent increase, while some small businesses may experience negative financial impacts.
Joanna Carolan, owner of Aloha Spice Company and Banana Patch Studio in Hanapepe, says her minimum starting pay for employees is $12 an hour depending on their experience.
“The increase in minimum wage will not affect my business or my employees,” Carolan said. “With unemployment rates so low, I have found that in order to keep good employees, I need to pay living wages.”
“I do think this will affect restaurants who pay their servers minimum wage plus tips,” she added.
Evelyn Acoba, owner of Boba Tea &Company in Lihue, says they hire younger students at minimum wage to work part time at the small, family-owned cafe. With the recent wage increase, they have had to find creative ways to compensate for payroll expense.
“We’ve added things to our menu to add to the sales so that we can make more money,” Acoba said. “We have to keep the workers at a minimum because we’re obligated to pay for insurance. So that in essence for small business owners is a little bit harder.”
For one Boba Tea employee, 19-year-old Kylene Rapacon, the wage increase helps financially.
“It’s great, but living in Hawaii it could be more,” Rapacon said. “Kauai is hard, the rent and everything is so expensive.”
Rapacon was working three jobs and recently quit another position to work at Boba Tea for more hours and more pay.
“I’m glad that minimum wage went up, but I wish it was more,” she added. “I struggle to get what I can provide for my family.”
Chef Harry Shigekane, owner of Daddy O’s restaurant in Rice Shopping Center in Lihue, says he won’t be impacted by the increase since his employees are all paid above the new minimum wage. However, he acknowledges that some small businesses will be impacted.
“The food industry is going to be affected big-time, because a lot of mom-and-pop operations are working on a very low profit margin,” Shigekane said. “And that was a significant jump, too.”
“If you’re marginal to begin with, you’re going to cut back somewhere, be it in the labor side or increase prices. One way or the other, something’s gotta go.”
Thor Alvarez, sales manager at Vim ‘N Vigor of Lihue, has been in the health food industry for the last 10 years. He’s always taken on the approach of a previous mom-and-pop store he worked at where the owner paid employees well so they put forth more effort.
“It’s an investment in employees,” he said. “We’d rather keep people on than have to deal with a revolving door, which happens many times when people get paid too little.”
He also feels that incentives are key. If someone is hired at a low wage, he wants to give them incentives to make more money if they have no experience. This gives them a chance to learn and allows him to see if the position is suitable for them.
“Even $10 after tax may not be as livable, and then people need two or three jobs,” Alvarez said. “People on Kauai got to hustle.”
This is the fourth and final rise in the minimum wage since 2015, according to the state Department of Labor &Industrial Relations. Previously, the minimum wage had stayed the same for eight years, at $7.25 starting in 2007.
Some larger corporations are taking longer to get the message.
One employee at a restaurant, who wished not to be named, said her hourly wage did not increase at the start of the year, with the employer still paying $9.25 an hour. The employee said a pay increase would be welcomed to help with expenses.
Workers need to be aware that the pay rate should be given at the time of hiring, and any changes to payment agreements require advance notice in writing or posted at the work site. Paychecks are due at least twice a month and should be issued within a week after the pay period ends.
