Hawai’i Minimum Wage: Common Sense Trumps Research

When it becomes law, HB 2510 will increase Hawaiʻi’s minimum wage from its current $10.10 per hour to $18 per hour....
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When it becomes law, HB 2510 will increase Hawaiʻi’s minimum wage from its current $10.10 per hour to $18 per hour. The new minimum pay for workers will rise incrementally with an increase to $12 per hour on Oct. 1 of this year followed by Jan.1 increases to $14 in 2024 and $16 in 2026 before reaching the maximum $18 in 2028.

The bill was signed into law by Gov. David Ige on June 22.

HB 2510 will increase Hawaiʻi’s minimum wage from its current $10.10 per hour to $18 per hour. Photo by Joel Dyer

But that doesn’t mean everyone is happy about this ground-breaking legislation that is expected to give workers in Hawaiʻi the highest minimum wage in the United States. Some business interests and conservative think tanks have been vocal critics of the bill, claiming it will cost the state jobs in the long-run. But that argument seems a little shaky at best.

In 2010, researchers examined low-paying jobs such as restaurant workers in local economic areas that included pairs of counties on opposite sides of state borders. Their findings have been used as strong evidence that raising the minimum wage does not cost jobs in low-paying sectors.

But Grassroot Institute of Hawaii, a conservative business think tank, has been telling all who would listen, including the governor, that the 2010 research is flawed. As proof, they cite a new study that says the original 2010 study didn’t take into consideration whether or not the cross-border counties were commuting zones—meaning they were economically interconnected in that way. Translation: The new study did something a little different than the old study (considered commuting zones) and therefore the new study gets to declare the old study is no longer correct in its findings.

On the surface, it would seem a real battle of the researchers. But does any of this research matter in Hawaiʻi? The median price of a Maui home hovers around $1.23 million. Restaurants have been forced to raise their prices through the roof as the cost of ingredients and rent have skyrocketed. And anyone who has walked out of a grocery store of late can attest to the devastatingly high price of food. If you haven’t considered it, both pieces of research cited above as pro or con are nearly worthless when applied to an island state. No minimum wage workers are commuting cross-border to their job in Hawaiʻi from California, Oregon or Washington. They aren’t even commuting cross-county from other islands. So, none of the cited research is really a great fit.

But what we do know is that a minimum-wage worker making between $1,400 and $1,750 a month can’t afford to rent an apartment and eat, let alone feed children, drive a car or pay for anything else. Sometimes common sense trumps research.

Joel Dyer

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