Senate Minimum Wage Bill Will Fail Hawaii's Low-Wage Earners

With SB 2609 moving in Senate, Grassroot Institute says it will fail in its objectives

News Release from Grassroot Institute, February 25, 2014

HONOLULU, Hawaii—February 25, 2014—With the Senate committee on Ways and Means scheduled to hold a public decision making session on SB 2609 (a proposed raise of the minimum wage) on February 26th, the Grassroot Institute of Hawaii urged legislators to take a clearer look at the bills probable effect on Hawaii's businesses and working poor.

The extent to which an increase in the minimum wage will be effective in helping Hawaii's lowest-paid workers is in serious doubt. A recent report from the Grassroot Institute, Four Things You Should Know About the Minimum Wage Debate in Hawaii, found that a raise in the minimum wage will benefit less than 4% of low-income families while raising the costs of low-skilled labor by 39%. The probable result is that the proposed raise in the minimum wage would be ineffective in lifting working families out of poverty, but would create an additional burden for Hawaii's business and have a damaging effect on the rate of teenage unemployment.

"The proposed minimum wage increase will not achieve its objective of improving the plight of low-paid workers and may do significant harm to our state's small businesses," states Dr. Keli'i Akina, President of the Grassroot Institute of Hawaii. "Moreover, the tendency of minimum wage increases to have a negative effect on teenage employment is a real concern to those of us who are working to lower unemployment, not contribute to it. A combination of tax relief and a reduction in the obstacles that the state places on business and entrepreneurship in Hawaii is the best way to move forward in improving both our economy and the situation of low-wage workers."

The bill, which would raise the state's minimum wage to $10.10/hour by 2017 (and which eliminates the tip credit) has been the subject of much debate in this session, with even some its supporters concerned about how it will effect Hawaii's restaurant industry. The elimination of the tip credit, for example, privileges wait staff--who (with tips) can earn upwards of $20 per hour--to the detriment of back-of-the-house staff, who are likely to see their opportunities for higher wages disappear as local restaurant owners contend with the increased costs brought on by the bill.

"Hawaii's small business owners and entrepreneurs have clearly expressed their concerns with this bill," continues Dr. Akina. "The Grassroot Institute will continue to champion free market solutions that will revitalize the state's economy to the benefit of both our businesses and our low-income workers."

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About the Grassroot Institute of Hawaii:

Grassroot Institute of Hawaii is a nonprofit, nonpartisan research institute dedicated to the principles of individual liberty, the free market, and limited, accountable government throughout Hawai`i and the Asia-Pacific region.  Read more about us at http://www.grassrootinstitute.org/

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About Grassroot President:

Dr. Akina is a recognized scholar, educator, public policy spokesperson, and community leader. In 2012, he was a candidate for the non-partisan position of Trustee in the Office of Hawaiian Affairs.  Akina has decades-long experience leading non-profit organizations including Youth for Christ Hawai`i and the Center for Tomorrow’s Leaders. An expert in East-West Philosophy, he has taught at universities in China and the United States, and continues as an adjunct instructor at Hawai`i Pacific University and the University of Hawai`i at Mānoa. Read more: http://bit.ly/AkinaBioInfo