The legislature sputtered into session in Hawaii earlier this month. Already there has been much talk and speculation about what will be prioritized.
There’s no doubt businesses across Hawaii have struggled since the pandemic forced Hawaii’s economy to grind to a halt. Since then, our elected officials have focused efforts entirely on supporting businesses, leaving Hawaii’s workers flailing without a life-preserver.
With nearly $2 billion more in tax collections to spend, it’s clear our economy is surging back to life. This is the year to focus on working people who were struggling long before the pandemic only made things worse.
Raise the Minimum Wage
In 2014, after two years of fighting, Hawaii finally increased its minimum wage from $7.25 (2007) to $10.10 (2018). While this was a victory for advocates and minimum wage workers, it wasn’t nearly enough. It still isn’t.
Despite piles of data and evidence to the contrary, opponents continue to question the efficacy of the Minimum Wage. What otherwise seems generally accepted is the fact that no one in Hawaii can survive on the current minimum wage.
Advocates continued to push for an increase during the last two sessions. This, despite understanding the economic environment wasn’t conducive to an increase. They wanted to keep the issue at the forefront of economic conversations, even if an increase wasn’t likely. Or realistic.
Now Hawaii seems to be well on its way to full economic recovery. Revenue, for the first time ever, has topped $8 billion. Add the fact it’s an election year and the prospect of raise for minimum wage workers seems likely. So much so, that the Speaker of the House is on record supporting an $18 minimum wage.
Numerous Bills Proposed
Nearly 20 bills have been introduced that take up the question of the minimum wage in some fashion or another. I’ll highlight a few here.
The bills introduced by the newly formed Working Families Caucus would be the ideal. HB1503/SB2243 increase the wage to $18 by 2026, do away (finally) with the tip credit, and ties future increases to the “Urban Hawaii Consumer Price Index.” Sadly, I don’t think either of these bills are likely to get a hearing. Which brings me to “the good” bill.
The Senate, arguably in an effort to drive the discussion on minimum wage, is already poised to pass to the House their bill, SB2018, introduced by ally Senator Brian Taniguchi. This bill simply increases the minimum wage to $18, by 2026. No change in the tip credit. No CPI chain.
While obviously not what advocates want, but this is an excellent bill that takes a huge step toward making Hawaii’s minimum wage a “living wage.”
The House Majority Caucus proposal, on the other hand, is very, very bad.
HB2510, seemingly intended to force support from advocates, includes not just an offensive minimum wage proposal. But also lots of good tax credits for the working poor. Absent the minimum wage language, this bill would probably garner universal support from working families advocates.
The Majority Caucus’ language increases the minimum wage to $18… by 2030. Or approximately $1 a year. Even conservative inflation estimates suggest the inflation-adjusted $18 in 2030 would be less than what workers receive now. This is also worrisome given DBEDT says an individual needed approximately that much to be “self-sufficient” in 2020.
The bill also dramatically increases the tip credit. Meaning those making the minimum wage in restaurants will end up being even further behind than they are now.
Legislators who signed this bill should be ashamed for supporting such a terrible bill. Tax credits aside. This bill should be opposed by anyone who considers themselves progressive or an ally of working families.
Taxes & Credits
Exempting Unemployment Benefits From Income Taxes
Since Hawaii’s economy collapsed in 2020, we saw unemployment soar. With the help of the federal government, we were able to increase and extend benefits to those unfortunate masses who were laid off as a result of the COVID-19 pandemic.
In early 2021, as people were filing their taxes, there was outcry and outrage. People on unemployment realized they’d have to pay taxes on the benefits they’d been collecting for a year.
During the 2021 legislative there was a full-court press effort change state law to change this offensive tax policy. Per usual, the focus and priorities laid almost entirely with shoring up state revenue and protecting employers.
This year the state’s coffers are overflowing and it is the perfect time to exempt unemployment benefits from personal income taxes. Unfortunately, I’m only aware of two bills that address this critical issue. Both from the Working Families Caucus: HB1505 and SB2242. Let’s hope one, or both, of these moves.
Increasing the Renters and Food-Excise Tax Credits
These are two critically important tax credits. They were designed to help those living in poverty. However, the legislature has been loathed, for years, to increase either of these credits.
They must finally be increased substantially to catch-up with the inflation and cost of living increases since it was last updated.
There are numerous bills that set out to increase these credits in some form or another.
Making the EITC Permanent and Refundable
This is an issue that working family advocates have been pushing for a number of years. While an EITC was established by the legislature a few years back, they did not make it refundable. It was also created with a sunset of this year.
Thankfully, the legislature this year appears to have an interest in finally making the EITC refundable. And permanent. This is apparent in the number of bills that seek to do so. Again, the Working Families Caucus has introduced measures to do just that: HB1507 and SB2485. These bills pay for the refunds with increases to the Capital Gains Tax.
Paid Family and Sick Leave
Paid leave has been an issue of importance in the U.S. for years. Perhaps decades. The U.S. (including Hawaii), is the only industrialized country in the world that doesn’t mandate any kind of paid family or sick leave to workers. There is the Family and Medical Leave Act (FMLA) provides workers protected unpaid leave.
Unfortunately, for most workers, taking unpaid leave isn’t an option. As the middle class has shrunk, fewer and fewer workers can afford to take any unpaid time off. Too many workers today, especially minimum wage workers, are just one missed paycheck away from being houseless.
Working family advocates have been pushing for mandated sick and family leave for years in Hawaii. To no avail.
Bills have been introduced to address this problem. Rather than list them all, again I will point to the Working Family Caucus proposals:
Despite what the COVID-19 pandemic has shown us about the importance of paid leave, the Hawaii Legislature seems yet again uninterested in providing this benefit to workers. Here’s hoping I’m wrong.
This is a pivotal year for working families. Let’s push hard to ensure they’re uplifted.