How much is Hawai‘i’s minimum wage now?
Hawai‘i’s minimum wage increased to $10.10 on January 1, 2018. At this rate, a person working full-time, with holidays or vacation or sick time, takes home just $21,000 a year. The legislature in 2014 enacted incremental increases to Hawai‘i's minimum wage, with $10.10 as the last step, so it's now losing ground to inflation.
With the highest cost of living in the nation, $10.10 is not a living wage for a single adult in Hawai‘i, much less adults supporting children and others. As low-wage jobs become the new normal, working families are falling further and further behind even as the economy continues to grow.
Why $17 rather than $15, or some other number?
Any less than $17 would not be enough to pay for basic needs such as food, housing, transportation, health care, let alone incidentals and emergencies. According to data from the Hawai‘i Department of Business, Economic Development & Tourism, the self-sufficiency income standard for a single adult with no children in 2016 was nearly $33,000 per year, or $15.84 per hour for full-time work with no weekdays off. The self-sufficiency wage for that same adult rises to $27.00 per hour with the addition of a child.
Due to the large disparity between the current minimum wage and a living wage, many individuals work two or more jobs to maintain a basic standard of living for themselves and their families. While $17 is a good target for 2019 legislation, inflation and the cost of living will continue to rise. That’s why we are asking for legislation to include automatic adjustments based on the consumer price index, to keep the minimum wage at a livable level in perpetuity.
Isn’t $17 an awfully big increase?
The minimum wage has been falling behind the cost of living for more than 35 years. If it had kept up with productivity and inflation, it would be more than $15 by now. The proposed increase in Hawai‘i would not happen overnight. Instead, it would be implemented in steps over multiple years to allow businesses to adjust accordingly. Other high-costs states, such as California and New York, as well as Washington D.C., have already passed laws to increase their minimum wage to $15 in steps. Our cost of living is higher than these jurisdictions, however.
How would this affect small businesses?
Small businesses need customers. A $17 minimum wage would put additional money in the pockets of the people most likely to spend in their communities, and the higher wages mean more productive employees and lower turnover for small businesses. Research shows that higher wages raise worker morale, productivity, and loyalty, which reduces employers' turnover, hiring, and training costs.
Would prices go up?
Price increases are a built-in part of our economic system. Because businesses are under pressure to increase profits, prices go up even when wages don’t. Economist Robert Reich says that a $15 minimum wage is unlikely to result in significantly higher prices because the businesses most affected are in intense competition for customers and would sooner reduce profits than increase prices more than a few cents.