Tuesday, October 15, 2024
Hawai'i Free Press

Current Articles | Archives

Saturday, February 25, 2017
62% Hike in Minimum Wage Hike Will Hit Consumers, Small Business Hard
By Grassroot Institute @ 2:58 AM :: 7067 Views :: Labor, Small Business, Cost of Living

Grassroot Testimony on SB107 (Relating to Minimum Wage)

From, Grassroot Institute

To: Senate Committee on Judiciary & Labor
Sen. Gilbert S.C. Keith-Agaran, Chair
Sen. Karl Rhoads, Vice Chair

From: Grassroot Institute of Hawaii
Joe Kent, Vice President of Research

RE: SB107 – RELATING TO MINIMUM WAGE

Comments Only

Dear Chair and Committee Members: February 14, 2017

The Grassroot Institute of Hawaii would like to offer its comments on SB107, which would increase the minimum wage to $15/hour by 2019 and remove the “tip credit” for employees whose wage includes tips.

Grassroot Institute is deeply concerned about the possible effect of this legislation on the state’s small businesses and economy—especially in the case of restaurants, which are already notorious for their razor-thin profit margins. Moreover, we believe that this bill will fail in its intent to help lift the state’s working families out of poverty. As our previous research on the issue found, increasing minimum wage benefits only a small proportion of low-income working families while raising the cost of low-skilled labor by a significant degree. In addition, an increase in the minimum wage will reduce teenage employment—an item that is often overlooked, but should be taken seriously by those looking to ensure the long term health of our economy.

Under the current proposal, the minimum wage is increased from $9.25 to $15.00 in a two year period. This means that the annual full-time costs for low-skilled labor (40 hour workweek) will increase by $11,960, which represents a 62% increase. For companies that primarily employ low-wage workers, this is a significant increase in labor costs—one they may choose to absorb by hiring fewer workers and raising prices. It is hard to imagine how further raising the cost of living and creating higher unemployment benefits the state economy.

The removal of the tip credit is an additional source of concern. The lack of a tip credit places a substantial burden on restaurants, which will be forced to privilege wait staff (who already average, with tips, salaries well above minimum wage) over back-of-the-house and non-tipped staff. In effect, this bill makes it more difficult to raise the dishwasher’s pay because the restaurant owner is required to spend even more on the sommelier.

Grassroot Institute of Hawaii looks for solutions that would strengthen our state’s economy and benefit both businesses and employees. You have heard from multiple representatives of Hawaii’s business community that this bill will not only be a burden, but that it will also have a negative effect on employment in general. Not only will companies in Hawaii be forced to lay off workers or cut hours or benefits in order to afford increased wages, but they are also likely to slow (or even eliminate) new hiring.

If we want to establish our state as a desirable place to do business, we cannot continue to treat company earnings as an endless well for the state to draw from on demand. 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 … not a minimum wage bill that will do little to help working families, while placing a significant burden on small business.

Thank you for the opportunity to submit our testimony.

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

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 Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii