Minimum-wage employees in Hawaii will get a pay hike of nearly 17% to kick off the new year.
In 2022, then-Gov. David Ige signed a law instituting a multistage plan to increase the minimum hourly wage from $10.10 in 2022 to $18 in 2028. After an initial hike in October 2022 to $12, the next increase will take place on Jan. 1, bringing the minimum wage up to $14.
With that increase, Hawaii will have the 10th-highest minimum wage in the country, tied with Rhode Island and Illinois.
Hilo Rep. Richard Onishi, who was a strong advocate for the wage increase in 2022, said the boost is even more needed now, given the state of inflation and general cost-of-living increases over the last year.
“Even as the minimum wage goes up, if the cost of goods goes up at the same time, it’s not much of a gain,” Onishi said. “But at the same time, we have seen this huge increase in costs. But the pandemic has also affected the number of available workers.”
Businessman and former Puna Sen. Russell Ruderman, who advocated minimum wage hikes while in office, said the increased economic pressures of this year have made increasing wages even more imperative than before.
“In my opinion, not only can businesses bear the added cost, but they should,” Ruderman said. “Inflation is happening everywhere, but it’s not because Hawaii has increased the minimum wage at all. … I don’t think you can point to any part of inflation that’s happening because of a minimum wage increase.”
Ruderman, owner of the Island Naturals grocery chain, said he pays his employees more than the minimum wage because of his own personal philosophy — “I believe that people are worth more than that, that workers aren’t expendable, and it’s the right thing to do” — but also because it is a practical reality that higher wages attract employees in a competitive job market.
Onishi noted that even lower-scale jobs have begun offering four-digit signing bonuses to get prospective employees in the door, and that some groups have suggested to him that ending the wage increases at $18 in 2028 doesn’t go far enough.
However, Onishi added that the entire situation requires a delicate calculus: Wage increases lead to higher taxes and Social Security payments for the employee, an increased cost to the employer — who is already paying increased unemployment taxes as of this year — all of which affects how much money the state has at any given time.
While Onishi said he isn’t sure whether going beyond $18 an hour is possible, he said he is exploring other possible measures that could alleviate pressure on lower-income residents, including possibly reducing taxes at lower income levels or even shortening the time it takes to get income tax refunds.
Onishi explained that the majority of lower-income taxpayers have their state income tax payments deducted from their paychecks automatically, but usually get a tax refund months later after they file their tax documents, a rigmarole Onishi said doesn’t particularly benefit the lower-income taxpayer.
Whether any such measure could pass the state Legislature is up in the air, but Onishi said it should be legally possible.
“It’s just a matter of political will,” Onishi said. “It doesn’t make sense to go through all that process when people are struggling. This would get money in people’s pockets faster.”
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
