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Clock is ticking on minimum wage bill

Residents urge lawmakers to pass measure that would raise wage to $18

Sign wavers supporting a higher minimum wage for Hawaii workers line Kaahumanu Avenue Wednesday afternoon. The fate of a bill to raise the minimum wage to $18 by 2026 is up in the air as state lawmakers work to hammer out an agreement in conference committee by Friday. The Maui News / MATTHEW THAYER photo

Lawmakers are up against the clock to pass a bill that would raise Hawaii’s minimum wage to $18 by 2026 — a measure that’s garnered widespread support in an election year but is running into concerns over a credit for businesses where employees pull in tips.

House Bill 2510 would increase minimum wage from the current $10.10 an hour to $12 by Oct. 1, $15 by Jan. 1, 2024 and $18 by Jan. 1, 2026.

“I’m hopeful something will come out recognizing the needs of workers to be able to earn more per hour while at the same time taking into account the challenges the small businesses are having in so far as many of them are still recovering from the pandemic,” Rep. Angus McKelvey, who represents West Maui, Maalaea and North Kihei, said Wednesday.

McKelvey is one of many lawmakers “anxiously waiting” to see what comes out of talks between the House and Senate as a crucial deadline approaches Friday for the minimum wage bill and other measures.

Jacob Aki, communications director for the Senate, said Wednesday that lawmakers are still negotiating the bill and have until Friday to come to an agreement and vote in conference committee. If the measure doesn’t make it out of conference committee where lawmakers are hashing out their differences on the final version of the bill, it’s dead, Aki said.

South Maui Rep. Tina Wildberger said lawmakers are “stunned” that the fate of the bill has come down to the wire after the measure earned support from high-ranking lawmakers at the start of the session and passed unanimously through both chambers’ powerful money committees.

“I’m also wondering and waiting what we’re going to find,” Wildberger said Wednesday. “It’s really late and it seems like they’ve got to do something. But it looks like it’s going to be down to the last minute.”

No Maui County representatives or senators are on the conference committee.

Lawmakers have said one of the sticking points has been the issue of the tip credit, which allows businesses to pay less than the minimum wage if the tips employees receive raise their salary to a certain level above the minimum wage. The concern is that employees who work on the front lines of businesses waiting tables, for example, will pull in hundreds in tips a night and get the same hike in minimum wage as the employees in the back who don’t get tips.

In addition, not every tip-based business sees the same benefits — employees at mom-and-pop diners in Wailuku won’t make the same in tips as those at resort restaurants in Wailea.

Lawmakers worry that, if saddled with a higher minimum wage, some businesses will reduce employees’ hours, which could lead to them losing their health insurance coverage.

McKelvey thinks a solution would be to raise the minimum wage but use the state’s unexpected surplus in tax revenue to offer rebates, credits and other types of deductions to offset the costs so they don’t reduce hours or the number of workers they have.

“The surplus can be the key for creating a win-win situation where a rising tide floats all boats,” McKelvey said. “I’m not on the conference committee. Like everybody else I’m anxiously waiting to see what comes out of the committee.”

Wildberger, who voted yes with reservations when the bill passed through the House Finance Committee in March, said she supports a higher minimum wage but is concerned about the disparities within the food and beverage industry, where there are many people who need higher wages to make a basic living in Hawaii but others who are well compensated in tips.

Long before she ran for public office, Wildberger worked at a restaurant at the Grand Wailea in the 1990s where lobsters sold for at least $75 a plate and she brought in $300 in cash every night. On paper she had a $50,000-a-year job, but with tips, she was making the equivalent of a $70,000 annual salary.

“I fully support a livable wage. I have been walking and talking a livable wage the whole time I’ve been a small business owner,” said Wildberger, who says she pays her Kihei Ice employees a minimum wage of $20 an hour. “But I understand the considerations of the food and beverage industry where you have people that are earning very high wages in a lot of segments of the industry. … Those aren’t the people that are needing support in the wage issue. It’s the folks that still are not achieving the $50,000 annual revenue threshold that need support, basically. And I think there’s nuance that isn’t being addressed.”

On Wednesday, rallies were organized statewide to push lawmakers to advance the minimum wage bill and another measure that would extend the availability of the earned income tax credit another six years. About 10 people gathered along Kaahumanu Avenue to wave signs in support of the measures.

Alan Lloyd, who is an organizer at the Hawaii Workers Center, said he has been going door-to-door on Maui raising awareness about the bills in the Legislature and collecting signatures on petitions supporting the raising of Hawaii’s minimum wage to between $18 and $20 an hour.

“I’m hopeful that the bill will pass because it is an election year,” Lloyd said. “The minimum wage should be higher than $18 an hour. All the research and studies show that a single person needs at least $19.26 an hour to live in this state. Other studies are higher. If you think about the cost of living here and you say, ‘what do we need to live,’ it is higher than $18.”

He said it is a misconception that most of those who make minimum wage are teenagers, saying teenagers actually comprise closer to 20 percent of minimum wage earners.

Haiku’s Olivia Nguyen was holding a sign that read, “Two jobs are too many.”

“When I first came here eight years ago, I worked at a pizza place for $10.10 an hour plus tips,” Nguyen said. “I wouldn’t wish that on anybody.”

“Eighteen dollars an hour is being pragmatic,” Nguyen said. “I’m not sure it’s quite enough, but it will give employers a chance to catch up.”

Kahului resident Stoph Kasak was holding a sign that included, “Unionize and See Wages Rise. Educate, agitate and organize.”

“This is a time prime for the workers of the world to unite for better conditions,” Kasak said.

* Colleen Uechi can be reached at cuechi@mauinews.com. Matthew Thayer can be reached at thayer@maui.net.

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