HONOLULU (Reuters) - Hawaii lawmakers voted late on Tuesday to raise the U.S. state’s hourly minimum wage to $10.10 from the federal minimum $7.25 at a time of heated national debate over wages and rising income inequality.
The new rate brings the Pacific state into line with the hourly wage U.S. President Barack Obama has pushed at a federal level, where the current rate stands at $7.25. Legislation to raise the national minimum wage has stalled in Congress.
In Hawaii, as at the national level, proposed increases have
drawn strong opposition from some business owners, lobby groups, and economists, who say it will raise costs and kill jobs.
Hawaii now joins California, Maryland, Connecticut, and Washington, D.C., in passing legislation to raise their state minimum wage over time to, or above, the $10 hourly mark, according to the National Conference of State Legislatures.
Under Hawaii’s legislation, which passed both the state’s Senate and House of Representatives in almost unanimous votes on Tuesday, increased wages would be phased in and reach the new rate by January 2018.
Hawaii Governor Neil Abercrombie, who has expressed concern that the hourly minimum has not been increased since 2007, is expected to sign the bill on Wednesday.
Hawaii Democratic State Senator Clayton Hee said in an interview after the vote that Hawaii’s high cost of living made an increase vital for low-wage earners struggling to get by.
Hawaii Restaurant Association Executive Director Roger Morey told Reuters that restaurants would have to absorb rising costs in Hawaii’s tourism-dependent economy, though the slower phase-in would help businesses prepare.
Much of the Hawaii wage debate has centered on tips. Under the measure, employers of tipped workers making less than $17.10 per hour with tips would be required to pay the minimum of $10.10 per hour. For workers making more than $17.10 per hour, employers can deduct a $.75 tip credit from the wage.
Under the current $7.25 hourly rate, the tip credit is $.25 per hour for those workers making at least $7.75 an hour.
Reporting by Malia Mattoch in Honolulu; Writing by Eric M. Johnson; Editing by Gareth Jones