The 2018 elections brought the number of living wage supporters above a majority in both the House and Senate, setting the stage for a living wage bill to pass in 2019. This follows a campaign season where both Ige and Hanabusa frequently discussed their support for a living wage.
A living wage is what a full-time worker needs to afford their basic needs. For employees without employer provided health care, a living wage is well above $20/hr here in Hawaii. Fortunately, many employees are provided health care--dropping the living wage down to just $17/hr, or approximately $34,000 annually. Hawaii’s minimum wage currently sits at only $10.10, meaning full-time workers only earn $21,000 per year.
Despite laborers fighting for a 40 hour work week for centuries, Hawaii’s low wages require many workers to put in 65 hours or more, just to make ends meet.
Hawaii’s economy booming during minimum wage hikes
It’s no wonder that there’s significant support for a living wage now. The minimum wage increased 40 percent since 2014 from $7.25 to its current $10.10, and since then our economy has soared, providing enormous benefits to our entire community.
Since 2014, Hawaii’s unemployment rates have hit all-time lows, our economy employs more people today than ever before, and more than 90,000 workers have had their wages lifted above $10.10 an hour.
The average Hawaii worker has also seen their spending power grow since 2014. After adjusting for increases in cost of living, real annual wage growth was $2,000. In the four years prior to 2014--when the minimum wage was stagnant--average real wages declined by $1,300, leaving workers worse off.
Small businesses growing
When workers get raises, it adds more money to our local economy rather than staying in the pockets of tourists or multi-national corporate shareholders. Hawaii’s economy has grown 20% faster since 2014 than in the previous four years.
This boom has been felt by both local small businesses and restaurants. More small businesses are open today than in 2014, and local restaurants are employing 20% more servers.
Full-time workers still struggling
Despite these gains, Hawaii’s minimum wage is still the lowest real rate in the country. 200,000 workers earn below a living wage--more than one third of all local employees, the highest percentage in the nation.
Alternatives to minimum wage increases have been suggested to help low wage workers, like decreasing living costs via tax cuts or increasing state subsidies. However, even when all these efforts are put together, they’re still short of closing the $13,000 annual gap between what a full-time minimum wage worker earns now and what’s needed to afford their basic needs.
The benefits of minimum wage increases are straightforward, leading national Democrats to push for a $15 federal minimum wage. Also, more than a dozen states will have minimum wages above Hawaii’s, including conservative and inexpensive states like Arizona, Arkansas and Missouri. With the nation’s highest cost of living and Democrats in power, it’s clear why Hawaii’s legislators are looking to solve our low wage crisis in 2019.
A living wage bill would continue our steady growth
Most living wage proposals won’t have the minimum wage reach $17 per hour until at least 2025. This patient transition in our current wages to a living wage will help our economy and local small businesses grow just as it has for the last four years.
In 2018, House Speaker Saiki and Finance Chair Luke co-sponsored legislation introduced by Labor Chair Johanson to move the minimum wage to $15 but it wasn’t voted on in the House, and the Senate’s version met the same fate. However, with the minimum wage currently stuck at only $10.10 and with majority support for a living wage in both chambers, Democratic leaders can get a much more robust bill to fly through the capitol next year.
Following the 2019 session, Hawaii should be on course to make sure all full-time workers can meet their basic needs, continue to help our small businesses grow and affirm our position as a state that truly supports the local community.