Gov. Neil Abercrombie on Friday signed a minimum-wage increase into state law, couching the pay raise for low-income workers in Hawaii’s proud, and often forgotten, history of labor activism.

At a signing ceremony at the state Capitol auditorium, the governor dedicated the law to the late Dave Thompson, a revered activist with the International Longshore and Warehouse Union, and others who have strived for worker rights.

Abercrombie said he has always disliked the label of a minimum wage because, he said, "it has the connotation, ‘What’s the least we can do to let you survive?’ I always thought it wasn’t a minimum wage; it was a survival wage.

"And in today’s world, that minimum wage is not a survival wage — certainly not in Hawaii and almost anywhere else, as well."

The state’s $7.25-an-hour minimum wage will gradually climb to $10.10 an hour by January 2018. The 25-cent tip credit, the amount businesses can deduct from workers who earn tips, will expand to 75 cents. But businesses will not be able to deduct the tip credit unless workers earn at least $7 an hour above the minimum wage, up from 50 cents.

While the new law is an election-year policy victory for Demo­crats, who have highlighted income inequality as a theme in Hawaii and across the nation, passing a minimum-wage increase was a two-year struggle at a Legislature controlled by majority Demo­crats.

Hawaii’s minimum wage has not been increased since 2007.

Just 2.2 percent of the state’s labor force earns the minimum wage. Yet the low wage floor has disappointed labor and social-service advocates given the state’s high cost of living and the 6.2 percent of workers who hold multiple jobs to make ends meet.

Abercrombie has called for a minimum-wage increase for the past two years. President Barack Obama has also sought to raise the federal minimum wage to $10.10 an hour, yet Hawaii lawmakers only agreed to $10.10 after the persistence of state Sen. Clayton Hee and state Rep. Mark Naka­shima, the main negotiators on the bill.

Abercrombie symbolically opened the signing ceremony at 10:10 a.m. Friday.

Hee (D, Heeia-Laie-Waia­lua) said that if it were up to him and Naka­shima, the minimum-wage bill would have been even better. "This is a building built on compromise, and this was the best compromise," he said.

Nakashima (D, Kukui­haele-Lau­pa­hoe­hoe-North Hilo) said raising the minimum wage will be good for the state’s economy. "Money put into the hands of Hawaii’s working people will get spent. It will increase the economic activity in the state," he said.

The Rev. Bob Nakata, one of the social-service advocates who worked for a minimum-wage hike, had wanted lawmakers to eliminate the tip credit entirely and link future increases in the minimum wage to the Hono­lulu consumer price index.

"This is a creature of compromise," he said, "but the legislators really felt they had to do something. The pressure had built up so they had to do something."

Food and restaurant interests, along with other businesses, told lawmakers that they might have to reduce hours and benefits or not hire as many seasonal workers if a minimum-wage increase were approved.

Sherry Menor-McNamara, president and chief executive officer of the Chamber of Commerce of Hawaii, said, "While the chamber was supportive of an increase in minimum wage, as the voice of business in Hawaii, particularly small businesses, we supported having an increase that more gradually rose over a longer period of time to have less of a negative impact on businesses."

She added, "The legislative process took its course, and we would like to thank those legislators who supported business and balanced all of the needs in our community."

Abercrombie said he has heard the same arguments from business since the early 1960s, when he said he first came to the Capitol with Thompson of the ILWU and observed a debate over the minimum wage.

"And I guarantee you — guarantee — that if you went back and got a transcript of the discussion back there in the early 1960s and took a transcript of the discussion, an argument about whether or not the minimum wage should be raised, it would be almost word for word," the governor said — "the same kind of tired cliches and arguments in opposition."