The lowest-paid workers in Hawaii will not see an increase in pay in the coming year at a time when most unionized public workers and civil servants, including state lawmakers, are getting pay raises.
Lawmakers failed to reach a compromise on a proposal to raise the state’s $7.25-an-hour minimum wage before an internal deadline of 6 p.m. Friday to complete work in time for final votes to be taken next week.
"It’s a damn shame that this Legislature could not come to a better conclusion in helping people who are making below a living wage," Sen. Clayton Hee (D, Heeia-Laie-Waialua), the Senate Judiciary and Labor Committee chairman, said at the conclusion of the conference committee.
Gov. Neil Abercrombie, who had proposed an increase in the minimum wage in his State of the State speech in January, also expressed frustration.
"The governor is disappointed that a compromise could not be reached," Louise Kim McCoy, the governor’s spokeswoman, said in a statement. "He feels strongly that minimum wage earners deserve an increase, and this decision hurts those who need it the most."
Rep. Mark Nakashima, the House labor chairman, noted the raises and pay restoration most public workers are about to receive.
"It’s really unfortunate that we were not able to also take care of those at the lowest end of the pay scale," Nakashima (D, Kukuihaele-Laupahoehoe-North Hilo) said.
Failure on the minimum wage comes on the heels of public-worker unions reaching agreements in recent weeks on new contracts that will provide raises to virtually all public employees. By July 1, the start of the new fiscal year, those workers also will get restored 5 percent pay reductions imposed in 2009 to help the state close budget shortfalls during the recession.
Lawmakers and other public servants — including justices, judges and certain Cabinet positions in the Governor’s Office — by virtue of the most recent state Salary Commission recommendations approved by the Legislature earlier this year, also are expected to receive raises at the start of 2014 on top of the restoration of the 5 percent reductions from 2009.
On July 1 state representatives’ and senators’ pay will go from $46,273 annually, their 2009 pay rate minus 5 percent, to the current annual salary of $55,896 recommended by the commission for 2013. They are scheduled to receive raises to $57,852 on Jan. 1, with 2 percent annual increases through 2018. The House speaker and Senate president receive an additional $7,500 annually.
In Senate Bill 331 the Senate had proposed a minimum-wage increase of $2 hourly phased in over two years. The latest House version of the bill proposed an increase of $1.75 hourly over four years, citing concerns of businesses which remained wary of too high an increase in a still-sluggish economy.
Negotiators were hung up on the tip credit. Currently 25 cents, the credit is the amount below minimum wage that employers can pay gratuity-intensive jobs such as waitstaff and valets. The House had staked out a position of 35 cents, an increase of about 24 percent and roughly equal to the percentage increase in the minimum wage, Nakashima said. The Senate had sought a tip credit of $2, an 800 percent increase.
"They were not willing to move off of that amount," Nakashima said. "The House made substantial movement toward the Senate, but the Senate was not willing to compromise and unfortunately we lost the bill."
Hee said the Senate was willing to increase the minimum wage up to $9.50 an hour.
"I believe there was too much effort that was focused on waiters and waitresses, not enough effort spent on everybody else," Hee said in regard to the tip credit discussions. "I happen to believe if a waiter or waitress may make, let’s just say $75,000 a year, that waiter or waitress did it on his or her legs as opposed to sitting behind a desk and that he or she earned every penny."
He declined to characterize how far apart the discussions were on the tip credit. "The last proposal we tossed over," Hee said, "the tip credit was too high."
