Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Labor, to which was referred H.B. No. 166, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to increase the minimum wage from its current level of $5.25 per hour to $5.50 per hour beginning July 1, 2002, and $6.00 per hour beginning July 1, 2003.

Your Committee received testimony in support of this measure from the Department of Labor and Industrial Relations (DLIR), the Hawaii State Commission on the Status of Women, the Hawaii State Teachers Association, the Women's Legislative Coalition, Advocates for Consumer Rights, the Hawaii State AFL-CIO, the Hawaii Catholic Conference, the Kokua Council, Parents and Children Together, the American Friends Service Committee, and two private citizens. Testimony in opposition was received from the Retail Merchants Association, the National Federation of Independent Business-Hawaii, the Hawaii Hotel Association, and the Chamber of Commerce of Hawaii. Although no provision to reduce the minimum wage tip credit was contained in the measure, your Committee also received testimony from the Hawaii Restaurant Association and three restaurant owners testified in opposition to any reduction in the minimum wage tip credit.

Your Committee finds the minimum wage increase was last increased in 1993 to the current amount of $5.25. However, inflation has eroded workers' purchasing power since then. Testimony of the DLIR indicates that today's $5.25 minimum wage is worth only $4.65 per hour, and would be worth $4.55 in 2002, and $4.45 in 2003, adjusted for inflation. Ten states or jurisdictions including the western states of California, Washington, Oregon, and Alaska have a higher minimum wage than Hawaii, ranging from $5.65 in Alaska to $6.75 in Massachusetts.

Your Committee further finds that Hawaii ranks in the top five states in cost of living. This measure is intended to provide a modicum of relief to Hawaii's workers from the high cost of living.

Your Committee has amended this measure by:

As affirmed by the record of votes of the members of your Committee on Labor that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 166, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 166, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.