Posted on: Saturday, March 19, 2005

Views mixed on wage increase

By Gordon Y.K. Pang
Advertiser Capitol Bureau

Melissa Cadelina makes minimum wage — $6.25 an hour — working as counter help at the 'Ewa Beach Loco Moco Drive Inn.

The 16-year-old Moanalua High School junior supports an increase in the minimum wage that is being discussed at the state Legislature. Cadelina works in part to help pay some of her expenses, but said the job is not critical for her or her family.

But there are others, including teenagers, who work out of necessity and for whom a minimum wage increase could make a difference, she said. "There are a lot of teenagers out there who are really working their butts off, and they don't really get anything out of it," Cadelina said.

The House Labor Committee yesterday advanced a bill that would raise the minimum wage to $6.75 an hour beginning next year and to $7.25 in 2007. A Senate proposal calls for $7 in 2006 and $8 in 2008. The federal minimum wage is $5.15.

Pia Baldovi, Cadelina's co-worker, also supports an increase in the minimum wage. A 17-year-old Moanalua senior, Baldovi got a 25-cent raise from minimum wage after working about six months at the eatery.

An increase in minimum wage would help her, she said, and she would not need to rely on her bosses to make that decision. "Right now, it's up to their discretion," said Baldovi, who is working in part to save money for college on the Mainland.

'Ewa Beach Loco Moco co-owner Eric Wong is not as enthusiastic about an increase in the minimum wage. He notes that, as in the case with Baldovi, those working at minimum wage usually get a raise after a probationary period of several months.

The few minimum wage workers he hires typically are new to the job market, go to high school and work part time, Wong said. On rare occasion, he may hire an adult at minimum wage who has no job experience and limited English skills.

If the minimum wage increases, he said, "we would probably have to give everybody raises." That could trigger an increase in his prices and then, he said, "customers may have a harder time coming in more often."

Like other restaurants, Murphy's Bar and Grill is allowed to pay employees who receive tips 25 cents below minimum wage, or $6 an hour. The Senate proposal calls for increasing the tip credit — how much less an employer can pay those who receive tips — from 25 cents to 75 cents an hour. As with Wong, Murphy's owner Don Murphy said an increase in the minimum wage would likely mean he will pay his other employees more as well.

Murphy said he will be OK with the pay increase, but "it's going to hurt a lot of people, especially smaller guys."

The state Department of Labor and Industrial Relations estimates 6 percent of workers in Hawai'i make minimum wage, half of whom receive tips that put take-home pay much higher.

Signe Godfrey, president of staffing company Olsten Hawaii, said few companies she serves pay minimum wage. "We're encouraging our customers to raise their minimum because we're finding it more difficult to find people who will work for minimum wage," she said.

She said she's torn about attempts to raise minimum wage. "I don't think government should direct companies to pay a certain amount, but then on the other hand I realize people cannot live on $6.25 an hour," she said.

Both business and union officials agree that while not too many make minimum wage, any movement upward would trigger a "ladder effect" for other workers. Backers of an increase say it's necessary to keep pace with inflation. Merchants say businesses will suffer.

Carol Pregill, president of the Retail Merchants of Hawai'i, opposes the bill. "This is really going to hurt smaller retailers," she said. "The bigger ones ... have the resources necessary to make the adjustment, but for smaller retailers, it's going to be very difficult for them to find the staff that they need."

Terry Lau, an official with the Hawaii State AFL-CIO, which supports an increase, said statistics show that more than half of those making minimum wage are adults employed full time.

Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or 525-8070.