Just when I thought Hawaii was going to get ahead of the federal minimum wage the President announces in his State of the Union that he wants to raise minimum wage to $9.00 and then tie it to an index that will automatically adjust it, and reminds everyone his competition agrees with him! This is what he said:
Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets. In fact, working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher. So here’s an idea that Governor Romney and I actually agreed on last year: let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on.If this sounds familiar, on January 22, Governor Abercrombie made a similar statement.
See http://www.whitehouse.gov/the-press-office/2013/02/12/president-barack-obamas-state-union-address-prepared-delivery
Many of Hawaii’s residents are the products of plantation-era workers – people who worked and toiled in the fields, earning the bare minimum in order to afford a better opportunity for their families.
Today, there still exists a hard-working sector of our society that deserves continued recognition. These are the working-class residents who earn the minimum wage. The minimum wage, currently at $7.25 per hour, has not increased for over 6 years. Nineteen other states plus the District of Columbia have higher minimum wage rates than Hawaii, with less to confront in terms of cost of living.
Therefore, I will be proposing a bill to increase the minimum wage by $1.50, to $8.75 starting in January 2014. Minimum wage earners provide immediate infusion of dollars into the economy. Everyone is worthy of their labor. Industry and corporations do not lack for support in these halls. Neither should those who work the hardest for the least return.What's the difference?
See: http://governor.hawaii.gov/2013-state-of-the-state/
The Governor has already introduced House Bill 916, that proposes we raise the minimum wage to $8.75 as of January 1, 2014, then each first of the year beginning January 1, 2015, the consumer price index would be used to keep the minimum wage on pace with the economy. Ten other states already do a version of this. See Arizona, Colorado (Article XVIII, Section 15 Colorado Constitution), Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington.
The cost of living index used to adjust minimum wage in House Bill 916 is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This is the same type of index used in calculations in other states with this method. The difference will be the Consumer Price Index used for each state will relate to the respective State, while the National minimum wage will likely be a national average. So while similar adjustment factors are used, the percentages of the change will be different to reflect the local area experience.
Another measure modifying the minimum wage that is still active in the Senate is Senate Bill 331,SD2. This bill increases the minimum wage in three stages ($8.25 by January 1, 2014; $8.75 by January 1, 2015; and $9.25 by January 1, 2016) then each year from January 1, 2017 adjusts the minimum wage by the same index as House Bill 916, although SD2 articulated Honolulu region.
Finally, there is a third minimum wage provision House Bill 1028,HD2 , that has just four stages of increase ($7.75 on January 1, 2014; $8.25 January 1, 2015, $8.75 on January 1, 2016 and $9.00 on January 1, 2017 HD2 version) without any adjustment by the Consumer Price Index. If the President is successful in putting a minimum wage of $9.00 in place with adjustments each year by the Consumer Price Index, the proposal in House Bill 1028 will not keep up with the federal limits.
Tip credit
House Bill 916, also includes an increase in tip credit. Employers who have tipped employees would be allowed to deduct 30 cents from the minimum wage as long as the employee is earning a combined amount from wage and tips of an additional 50 cents per hour in tips. So if the minimum wage were $8.75, the employer may pay the tipped employee $8.45 per hour, as long as the combined amount of wages and tips is at least $9.25.
SB 331, SD 2, now contains an undetermined amount of tip credit.
(This blog was updated 3/4/13 to reflect current Senate and House Drafts)
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