Timing is everything.
We are facing a devastating economic crisis in Hawaii, so it was shocking to read a column in the Honolulu Star-Advertiser on Jan. 13 written by Nate Hix that advocated for legislative proposals to increase the minimum wage to $17 per hour (“Speaker Opens in a new tab Saiki must stand with Opens in a new tabworkers Opens in a new tab,” Island Voices).
This will negatively impact businesses, especially the restaurant industry, which has been one of the hardest hit. Many have already closed for good and, surveys show 65% of restaurants will not survive the next six months unless considerable financial assistance is provided. In addition, all companies in the restaurant supply chain will be affected.
Currently, many small businesses are facing an uphill battle for their existence. Businesses are dying, while others remain in a constant struggle just to keep their doors open.
Our focus must be the survival of businesses whose doors are still open and help them to salvage the livelihoods of their owners and their employees. They need to pay their bills and maintain health care benefits, especially during this horrible pandemic.
As a Star-Advertiser editorial on Jan. 13 rightfully stated, “helping mom-and-pop businesses make financial ends meet must continue to rate as a priority in Hawaii” (“Small Opens in a new tab businesses need PPP Opens in a new tabinfusion Opens in a new tab,” Our View).
Businesses have painfully complied with state and county mandates in order to curb the spread of COVID at considerable costs and peril to their bottom lines. They have pivoted constantly and creatively to keep our unemployment numbers from swelling to unimaginable levels.
And, how do we repay them? By proposing a deathblow that would raise the minimum wage to $17 per hour.
The Chamber of Commerce Hawaii supported a minimum wage increase from $10.10 to $13 during the 2020 legislative session. Then, COVID hit. Given the current crisis, we cannot support any increase until our economy returns to pre-pandemic levels, which according to UHERO could take years.
Furthermore, unlike other states, Hawaii is the only one in the country that requires employers to pay for health care coverage for all employees who work 20 hours or more per week. This costs on average $6,000 per employee annually, adding a minimum of $3 per hour to each employee’s hourly wage. Additionally, an increase in wages is tied to increased costs for other mandates, such as workers’ compensation, temporary disability, unemployment insurance, payroll taxes and other voluntary benefit programs.
Add this up and we are talking about more than $17 per hour. Additionally, if we raise the minimum wage, then every other employees’ compensation level will need to be increased. Serious job cuts will be inevitable.
Simply put, if businesses close, jobs will be lost, families will be impacted, the state will lose substantial tax revenue, our local quality of life will be diminished and the small business landscape will be forever altered.
Our local business community has stepped up during this time, even when facing its own financial challenges. They donated to the Hawaii Foodbank and several other charitable causes. Business owners removed themselves from their company payrolls, so that they could continue to pay their employees’ health insurance and other benefits.
So, when we hear accusations about businesses being “anti-worker” and “greedy,” we know the individuals or groups making such claims must be incredibly misinformed and devoid of facts.
This legislative session is a critical, a make-or-break time for the business community. Therefore, the Chamber will be beating the business drum louder than ever before. In addition, we need businesses to tell their stories directly to the decision makers virtually, clearly and continually. Our message is clear. Timing is everything, and now is not the time.
Sherry Menor-McNamara is CEO of the Chamber of Commerce Hawaii.
