Wednesday, April 24, 2024
Hawai'i Free Press

Current Articles | Archives

Friday, January 3, 2014
Flawed Minimum Wage Hike Advocacy Will Cost Hawaii's Poorest Workers $7M this Year
By Andrew Walden @ 12:34 AM :: 7615 Views :: Labor, Small Business, Cost of Living

by Andrew Walden

Sticking it to restaurateurs is apparently more important than giving a raise to Hawaii's lowest-paid workers.  That's what last session's fight over SB331 teaches us about those lobbying for a minimum wage hike. 

Had it been enacted, SB331 would have "increase(d) the hourly minimum wage to $7.75 on January 1, 2014, $8.25 on January 1, 2015, $8.75 on January 1, 2016, and $9.00 on January 1, 2017."  But the bill stalled in conference and died for the session.  The reason?  Wage hike advocates refused to compromise on the "tip credit"--a clause creating a lower minimum wage rate for employees whose income is substantially derived from tips rather than salary. 

As a result, Hawaii's lowest income earners are out $0.50 per hour starting this week.  A full time worker working at minimum wage for all of 2014, would lose approximately $1000.  Fortunately, few work an entire year full time at minimum wage without a raise.  Nonetheless, they who can least afford it are losing money because of an anti-business political stratagem employed by those who pretend to speak for them. 

The federal tip credit is $5.12 per hour which sets the national minimum wage for tipped employees at $2.13.  Seventeen states have tip credit amounts in excess of $5.00 per hour.  Only six states require tipped employees to be paid at a rate higher than the federal minimum wage of $7.25/hr.  If SB331 were to pass without a substantial concession on tip credit, Hawaii would become the seventh. 

Hawaii's $0.25 per hour tip credit is among the smallest in the nation, forcing restaurateurs to pay $7.00 per hour to waiters many of whom are making more than $20 per hour when tips are included.  This increases prices for everyone and makes it more difficult for restaurants to properly compensate back-of-the-house employees who do not receive tips.  Higher restaurant expenses squeeze tourist spending, reducing the available amount for other activities and entertainment.

According to the US Bureau of Labor Statistics, of Hawaii's 331,000 wage workers, 7,000 earn minimum wage and another 7,000 earn less than minimum wage--4.2% of all workers.  BLS reports that 3/5ths of minimum wage workers nationally are employed in food service positions, a proportion which is likely much higher in tourism-intense Hawaii.  Just over 50% are under age 25.

In essence, 7,000 well-paid waiters are being played against 7,000 underpaid dishwashers.  At $1,000 each, that means a political strategy which valued squeezing small business over helping low wage workers cost $7M in lost wages for back-of-the-house staff.   

SB331 is still alive in the upcoming session.  Have its supporters learned anything from their failure?

---30---

Text, Status: SB331 SD2 HD1

2013: How Hawaii Minimum Wage Workers Earn $24.24 per hour

USDOL: State by State list of Tip Credit Amounts 

Hawaii Employers Council: Tip Credit Laws Made Clear

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT