The drumbeat for raising the minimum wage has grown louder, especially in the approach to Labor Day, with the employees of the fast-food industry leading the charge. In cities on the mainland, Thursday became an occasion for strikes at the chain eateries, drawing attention to the workers’ low earnings.
The movement didn’t seem to have as much resonance in Hawaii, which is somewhat surprising: This state’s minimum wage stands at the federal minimum, $7.25 an hour, despite the islands’ high cost of living. There has been a push to raise the minimum wage in the state Legislature. Given the more recent improvement in the state’s economy and the fact that there’s been no raise for years, that proposal deserves more discussion next session.
The Star-Advertiser has preferred the approach of enacting the earned income tax credit, which would provide more targeted relief to working families, rather than raising the floor for everyone. One valid concern is that there could be a reduction in job opportunities for first-time, teenage employees needing part-time jobs for casual spending money.
However, the winnowing of certain low-skill job openings is the likely outcome, anyway, in the continuing trend of automation. Recent books — two are "Race Against the Machine" and "The Lights in the Tunnel" — note that many more routine jobs could ultimately become robot work. Technology does produce new jobs, the authors acknowledge, but not enough in recent decades to replace those lost. Self-service will increasingly replace workers in fast food, they said, and even more knowledge-based jobs — tax preparation, for example — can be done by software.
The low-income worker in Hawaii is, increasingly, in need of a living wage. According to 2012 figures, only 29 percent of those earning the minimum are under 21; 55 percent are between 21 and 55.
But the larger workforce problem can’t be fixed simply by raising the minimum wage. There are multiple forces, such as automation and globalization, putting downward pressure on wages, producing the wage stagnation that is worrying economists everywhere.
A new paper by the Economic Policy Institute, a liberal think tank that advocates for low- to moderate-income families in the U.S., observed that "the wage and benefit growth of the vast majority, including white-collar and blue-collar workers and those with and without a college degree, has stagnated, as the fruits of overall growth have accrued disproportionately to the richest households."
So this is not a crisis only for the lowest income groups. Between 2002 and 2012, according to the paper, "wages were stagnant or declined for the entire bottom 70 per- cent of the wage distribution."
This is a recipe for persistent malaise, with fewer people able to spend and support the entire economy. Reversing this trend is a mammoth undertaking of national scope, but that doesn’t dismiss the need for local action. The critical need to attract companies and innovative startups that can create new lines of work with greater earning potential should drive leaders to adopt policies that support them.
To say there are no easy answers to this is putting it mildly. The emphasis needs to be on providing enhanced training, through the educational system with participation by employers. The jobs in Hawaii’s service industries, for example, must include positions with broader scope and skill requirements.
The idea is that employees need more than a boost in the minimum pay. They need upward mobility. The opportunities for real success have diminished, and that reality must be challenged.
