Posted on: Saturday, April 28, 2001

Minimum wage proposal advances in Legislature

By Lynda Arakawa
Advertiser Capitol Bureau

A proposal to raise the state minimum wage passed a major hurdle yesterday and is headed for the full House and Senate for a floor vote.

House and Senate conference committee members agreed on a bill that would raise the state hourly minimum wage from $5.25 to $5.75 beginning next year. The measure would increase the minimum wage by another 50 cents in 2003.

The bill would also raise the tip credit from 20 cents to 25 cents in 2002. That would allow employers to pay a $5.50 hourly wage to workers whose tips and wages total more than the minimum wage.

Senate Labor Committee Chairman Bob Nakata, D-23rd (Kane'ohe, Kahuku), said the wage increase is important because the federal welfare reform law will cut hundreds of welfare recipients from cash assistance in December. The 1996 law allows most families to collect welfare benefits for only five years.

"Families will be going off and they'll need that support," Nakata said.

Small-business advocates have typically opposed raising the minimum wage, saying it will hurt businesses and reduce the number of available jobs. They also have said the minimum wage was never meant to be a living wage. Nakata said he doesn't agree with that argument and said business lobbyists acknowledged that the minimum wage needed to be raised.

The last minimum wage increase was in 1993.