Hawaii House Major Committees Endorse Minimum Wage Increase and Earned Income Credit

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Two key House committees this morning gave their preliminary approval to a modest increase in the state’s minimum wage as well as a package of tax credits designed to help working families in Hawaii, but critics say that raising the minimum wage will not do enough to help those who need it most.

Bill 2541 would raise the minimum wage from $ 10.10 an hour today to $ 11 on January 1 and continue to increase the minimum in small steps until it reaches $ 13 an hour on January 1, 2024.

The measure would also create a refundable earned income tax credit for working families and increase the state food / excise tax credit to $ 150 per person for families earning less than $ 30,000 per year.

State tax authorities calculate that granting a refundable credit for state earned income would cost the state about $ 41 million more per year. According to tax authorities, the easing of the food tax credit / excise tax, designed to offset the impact of the state’s excise tax on food, would cost the state $ 36 million. extra dollars.

Critics of the minimum wage proposal have observed that companies ranging from McDonalds and Target to Starbucks are already paying their employees more than the minimum lawmakers are proposing to set early next year, suggesting that the project this law will not bring much relief to weak salaried workers.

The organization Young Progressives Demanding Action says the proposed minimums are “well below the $ 17 an hour needed for a single adult to meet their basic needs.”

Tax credits for low-income workers will help, but “the EITC refundable provision in this bill fails to make up the difference in those wages,” according to testimony submitted by the group.

The United Public Workers union urged lawmakers to set the minimum at $ 15 an hour by 2024, while ILWU Local 142 and the Hawaii State Teachers Association have suggested that the legislature impose a minimum wage. $ 17 by 2025.

Skeptics also find it telling that the Hawaii Chamber of Commerce did not oppose the proposal to increase the minimum wage to $ 13. In fact, the chamber described it as a “reasonable and gradual approach”.

The chamber has been a reliable opponent of minimum wage increases over the past few years, and critics of this year’s package say chamber support demonstrates that an increase to $ 13 over the next four years is too low. , too late.

California, Washington state and the District of Columbia have already approved minimum wages of $ 13 or more for employers with more than 25 employees, and 15 states have floor wages above the minimum in Hawaii today, according to the Department of State Labor and Industrial Relations.

The measure was approved by House finance and labor and public employment committees this morning, and lawmakers noted that the measure is part of a larger package of bills that are all designed to help working families cope with the rising cost of living in Hawaii.

The package includes measures to provide more affordable housing, affordable child care and other benefits, lawmakers said.

Asked about criticism that the minimum wage increase is too low, House Finance Committee Chair Sylvia Luke noted that a number of business groups strongly oppose the increase. minimum wage. Labor committee chairman Aaron Ling Johanson said lawmakers “were trying to find the right price.”

An overly dramatic increase in the minimum wage could prompt employers to reduce their employees’ working hours, leaving them worse off than before, he said.

“From an ordinary person’s perspective, we cannot let the perfect be the enemy of the good,” he said. “This bill is not meant to be a panacea for everything.”

The measure is now submitted to the Plenary Assembly for further consideration.


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