Standing for $18 minimum wage

LIHU‘E — When Nina Shanklin held a $16-an-hour job accounting for the county, she still found herself struggling to provide for her family.

“It was demoralizing,” she said. “Here I was having millions of dollars pass through my hands every day, and I can’t even go home and feed my kids.”

Shanklin, who now works for Doordash, was one of several supporters sign-waiving in favor of an $18 minimum wage Friday afternoon, the group convening outside of the Lihu‘e Burger King along Kaumuali‘i Highway in a demonstration organized by Raise Up Hawai‘i.

“A lot of the houseless community are full-time workers,” said Chris Molina, a social-work master’s degree student who also participated. “If there are people who are working hard and they’re not able to take care of their children and live a decent life, there’s something wrong with that picture.”

Drivers were responsive to the demonstrators’ message, honking and waving as they passed.

This demonstration comes after the state House pivoted away from the original minimum-wage proposal, Senate Bill 2018, that would have incrementally increased the minimum wage to $18 an hour by 2026.

A bill proposed separately in the House, House Bill 2510, introduced by 40 members of the House including Speaker Scott Saiki and Kaua‘i state Reps. Dee Morikawa and Nadine Nakamura, slows this rate of increase to $1 per year, reaching $18 in 2030.

“A lot of people are saying, ‘you said $18,’ and they didn’t expect it to come in a number of years,” said Morikawa. “In the House, we always try to look at two sides and try to come to that middle ground to make sure we take care of businesses along with the public.”

Additionally, wide-ranging legislation would make the state earned income tax credit (EITC) refundable and permanent, a move projected to put money in the pockets of working families, which Nakamura lauded as “an additional cushion for our working families.”

It would also increase the food excise-tax credit, would make the household and dependent-care tax credit apply to a broader group of individuals, and appropriate funds for outreach to educate low-income wage earners about their withholding options.

Finally, it would increase the tip credit — which allows businesses to pay tipped employees sub-minimum wages — from 75 cents to $2.75 beginning on Jan. 1, 2023. Some of these provisions are already contained in standalone bills before the Legislature.

The bill went before the Committee on Labor and Tourism last week, where it faced critical public testimony from both businesses and progressive organizations.

“This minimum-wage proposal doesn’t get by the end of the decade where we needed to be two years ago,” wrote Jim Frost, chair of the Democratic Party of Hawai‘i Labor Caucus, citing a state Department of Business, Economic Development &Tourism report that says the hourly wage would need to be $18.35 for an individual to afford the cost of living in 2020.

This self-sufficiency wage is actually higher on Kaua‘i, according to this report, at $19.62.

Demonstrators Friday likewise voiced opposition to the slower rate of increase, with Shanklin saying that “people need to feed their families now.”

On the other side of the issue, the Hawai‘i Chamber of Commerce presented a poll at the committee meeting showing that 66% of their businesses would reduce staff and 32% would shut down entirely if the minimum wage was increased to $18.

“The business community still sees the urgent need this year to help families that are struggling,” the chamber said in written testimony. “While there is consensus that the minimum wage needs to increase, the enactment of an $18 minimum wage by 2030 will likely undermine efforts to turn Hawai‘i’s economy around.”

They instead recommended increasing the minimum wage to $15 by 2027.

Businesses were not given a timeline for the increase in the poll, and most likely answered based on the assumption that the minimum wage would immediately jump to $18 rather than increase incrementally.

A 2020 DBEDT report on the effects of the minimum wage showed that there was actually job growth during the last minimum-wage increase in Hawai‘i, suggesting that “employment does not necessarily fall when the minimum wage is increased.”

The bill was amended at committee to adjust the minimum wage automatically each year after 2030 based on median hourly wage.

State Rep. Dale Kobayashi said at the hearing that while he wished the timeline was shorter, the tip credit wasn’t increased and minimum wage was indexed for the cost of living rather than the median hourly wages, he saw this as the best option available.

“In a non-election year, we were unable to pass $15,” said Kobayashi. “This is probably as good as it gets.”

The bill cleared the committee in a 6-2 vote. On Thursday, it passed second reading in front of the full House and was referred to the Finance Committee for further discussion.

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Guthrie Scrimgeour, reporter, can be reached at 647-0329 or gscrimgeour@thegardenisland.com.