LIHU‘E — After months of back and forth, the state House and Senate reached an agreement on the $18 minimum hourly wage in a conference committee session Friday.
The bill, unanimously supported by representatives from both chambers, would incrementally increase the wage in $2 increments — to $12 in October, $14 in 2024 and $16 in 2026 — until it reaches $18 in 2028.
It also increases the tip credit, which allows employers to pay tipped workers subminimum wage, incrementally to $1.50 an hour in 2028, and makes the Earned Income Tax Credit permanent and refundable.
This is a more-conservative version of the bill proposed by the Senate, which would have increased the wage to $18 an hour by 2026 while eliminating the tip credit entirely.
“While we didn’t get everything we wanted in the bill, the Senate recognized that the only way to ensure wage increases this session was to compromise with our House colleagues on the bill’s final language,” said state Senate President Ron Kouchi, a Lihu‘e resident who represents Kaua‘i and Ni‘ihau. “Recognizing that not everyone will be happy with this outcome, I want the people of Hawai‘i to know that the Senate will continue to work tirelessly to address issues related to the minimum wage and the cost of living.”
Members of the Kaua‘i delegation in the House have supported the more-conservative wage proposals, with state Rep. Jimmy Tokioka, who advocated for the increased tip credit, and state Reps. Nadine Nakamura and Dee Morikawa originally introducing a version of the bill with an even slower rate of increase.
Wages and housing
For many low-wage workers, $18 an hour could be a step towards housing security.
According to a 2021 report from the National Low Income Housing Coalition, a minimum-wage worker on Kaua‘i would need to work 116 hours a week to afford a one-bedroom apartment.
The report defines “affordability” as spending no more than 30% of income on rent, in line with the recommendations of budgeting experts.
Real wages at most Kaua‘i businesses are above the $10.10 minimum, but still do not meet the needs of renters.
The estimated mean renter wage on Kaua‘i is $14.82, meaning that a renter making the average wage still needs to work 79 hours a week to afford a one-bedroom apartment.
Kimberly Dasalia works for $15 an hour at a Lihu‘e gas station.
“When COVID hit, the landlord didn’t tell us that our house was going into foreclosure, so we got booted out of our house,” said Dasalia. “I’m working, he retired in October, and we’re having a hard time finding housing.”
They have been homeless since then, living informally on Grove Farm property.
“Yeah, it’s only three dollars — but that three dollars could very well get us into a house,” said Dasalia. “We’d love to have running water. I’m not complaining. A lot of people out there have it worse than us.”
Anne Frederick, executive director of the Hawai‘i Alliance for Progressive Action, a nonprofit which has advocated on behalf of raising the minimum wage, sees a link between low wages and homelessness.
“People are living out of their cars, under bridges,” said Frederick. “It’s a combination of the high cost of living and low wages. People are getting pushed out. It’s really sad to see generational families where their kids don’t see a future for themselves here.”
The bill, HB2510, HD2, SD1, CD1, now heads to the floor of both chambers for final floor votes before being transmitted to Gov. David Ige for his consideration.
