Frequently Asked Questions About a $15 Minimum Wage for Hawai‘i
How much is Hawai‘i’s minimum wage now?
Hawai‘i’s minimum wage Increased to $10.10 on January 1, 2018. At this rate, a person working full-time, with holidays or vacation or sick time, takes home $21,000 a year. The legislature in 2014 enacted incremental increases to Hawai‘i's minimum wage, with $10.10 as the last step, so it's now losing ground to inflation.
With the highest cost of living in the nation, $10.10 is not a living wage for a single adult in Hawai‘i, much less adults supporting children and others. As low-wage jobs become the new normal, working families are falling further and further behind even as the economy continues to grow.
Why $15 rather than $12 or some other number?
Any less than $15 would not be enough to pay for basic needs such as food, housing, transportation, health care, let alone incidentals and emergencies. According to data from the Hawai‘i Department of Business, Economic Development & Tourism, the self-sufficiency income standard for a single adult with no children in 2016 was nearly $33,000 per year, or $15.84 per hour for full-time work with no weekdays off. The self-sufficiency wage for that same adult rises to $27.00 per hour with the addition of a child. Due to the large disparity between the current minimum wage and a living wage, many individuals work two or more jobs to maintain a basic standard of living for themselves and their families.
Isn’t $15 an awfully big increase?
The minimum wage has been falling behind the cost of living for more than 35 years. If it had kept up with productivity and inflation, it would be more than $15 by now. The proposed increase in Hawai‘i would not happen overnight -- instead, it would be implemented in steps over multiple years to allow businesses to adjust accordingly. Other high-costs states, such as California, New York, and Washington, DC have already passed laws to increase their minimum wage to $15 in steps.
How would this affect small businesses?
Small businesses need customers. A $15 minimum wage would put additional money in the pockets of the people most likely to spend in their communities, and the higher wages mean more productive employees and lower turnover for small businesses. Research shows that higher wages raise worker morale, productivity, and loyalty, which reduces employers' turnover, hiring, and training costs.
Would people lose their jobs?
Despite claims to the contrary, decades of research has shown that raising the minimum wage does not increase unemployment rates.
The latest major study, in 2017, found that, on average, 137 minimum wage increases since 1979 reduced the number of jobs paying LESS than the new minimum while also adding jobs paying AT OR ABOVE the new minimum, effectively canceling each other out.
In 2016, President Obama's Council of Economic Advisers looked at 19 recent state-level minimum wage hikes and concluded that "the recent legislation contributed to substantial wage increases with no discernible impact on employment levels or hours worked."
Another paper in 2015 analyzed 15 years of minimum wage research and found "no support for the proposition that the minimum wage has had an important effect on U.S. employment." A 2013 study reviewed the literature since 2000 -- including two meta-studies -- and concluded that minimum wage increases "have no discernible effect on employment."
Last summer, a University of Washington paper that found negative job effects from Seattle's minimum wage increase made a lot of headlines mainly because it contradicted the existing body of research. In fact, a few days earlier, a University of California, Berkeley, study that found that Seattle's minimum wage increase had beneficial effects drew almost no media attention.
Since then, major flaws in the University of Washington paper have been found by economists at institutions such as the Economic Policy Institute, the University of California, Berkeley, and the Center for American Progress. As a result, some eminent economists who initially affirmed the Seattle paper have retracted their endorsements of it.
Would prices go up?
Price increases are a built-in part of our economic system because businesses are under pressure to increase profits, and as a result prices go up even when wages don’t. Economist Robert Reich says that a $15 minimum wage is unlikely to result in significantly higher prices because the businesses most affected are in intense competition for customers and would sooner reduce profits than increase prices more than a few cents.
I worked hard to make more than $15. What about me?
Many people believe that low-wage workers are lazy, but nothing could be further from the truth: many work more than full-time hours to pay their bills. The labor market is competitive, and a higher minimum wage drives all wages higher in the same way a low minimum wage drives all wages lower. A $15 minimum wage would give workers in the skilled trades more leverage to demand higher wages and fight back against the anti-worker policies that have made the rich richer and everyone else poorer.
What about all the problems that a $15 minimum wage won’t solve?
There are many serious problems in our world, and we can’t solve them all at once. A $15 minimum wage is a winnable reform that will give Hawai‘i families a much-needed raise .