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Civil Beat Column: Hawaii’s Economy Will Benefit From A Higher Minimum Wage

If we want to build a strong economy in Hawaii, we need to make thoughtful, well-informed decisions based on relevant, reliable data. When people and institutions twist information or use junk data to support their preferred position, it hurts all of us.

On Sept. 2 the Honolulu Star-Advertiser published an editorial in support of raising the minimum wage (“Hawaii’s workers could use a raise”).

A month later, Honolulu Civil Beat published an opinion piece (“Who Really Earns The Minimum Wage?”) in which the author argues against raising the minimum wage. She states that “two people can look at the exact same thing” and come to different conclusions about the minimum wage. However, the numbers that this writer cites to make her argument against raising the minimum wage are not relevant to the situation in Hawaii.

This isn’t even a case of comparing apples to oranges. It’s more like apples to orangutans.

The author states that “all informed discussion about the minimum wage must by necessity start with the ‘Characteristics of the minimum wage workers’,” a report that looks at the number of workers that are paid at or below the federal minimum wage of $7.25 per hour.

Eleven states and the District of Columbia currently have minimum wages higher than in Hawaii.

Our state’s minimum wage is currently $10.10 — still only $21,000 per year for full-time work. Looking at workers earning at or below $7.25 an hour is pointless, not only in Hawaii, but also in 28 other states, the District of Columbia, and dozens of cities and counties that have minimum wages higher than the federal level.

In fact, 11 states and the District of Columbia currently have minimum wages higher than in Hawaii, while they all have lower costs of living than we face here. Another eight states will pass us by Jan. 1, 2023, including very low-cost states like Missouri and Arkansas. Seven states and D.C. already have laws on the books to raise their minimum wage to $15, while our minimum-wage workers are stuck at $10.10.

In challenging a fact cited by the Star-Advertiser’s editorial board — that 14% of all workers in Hawaii make the minimum wage of $10.10 an hour — the author says that the portion of workers across the nation making $7.25 an hour is only 2%, and that most are teenagers. Why use numbers that don’t apply in Hawaii?

If she had, instead, looked at Hawaii-specific data from the U.S. Bureau of Labor Statistics she would have seen that there are more than 88,000 minimum wage workers in Hawaii — not 12,500, or 2% of the workforce here. She also would have seen that, of those 88,000 workers, 60 percent are women; more than 2 in 5 have at least some college education; 3 out of 5 are over the age of 25; and fewer than 1 in 10 are teenagers.

Study After Study

The majority of expert research finds that raising the minimum wage helps reduce poverty. The author of the opposition piece quotes from an out-of-date source, written in 2015, by an economist who has since walked that position back, publishing a new study showing that minimum wage increases are associated with reductions in poverty.

Here’s the truth: The minimum wage has been one of the most studied topics in economics for the past 25 years. Study after study finds that a higher minimum wage strengthens the economy and local businesses by raising the incomes of working families, putting more spending money in the pockets of customers. Significant data exists to show that raising the minimum wage also makes employees more productive and loyal, which saves small businesses money spent on turnover and training costs.

While our state’s minimum wage rose between 2015 and 2018, the unemployment rate dropped by 52% — to record lows — and restaurant server jobs have increased by 32 percent, despite warnings from the industry that the opposite would happen.

The evidence — from Hawaii’s own experience — is clear: A higher minimum wage is good not just for workers, but for the local economy and businesses. It’s time for Hawaii to raise the wage to a living wage.


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