HOUSE OF REPRESENTATIVES             H.C.R. NO.            
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                     HOUSE  CONCURRENT


 1       WHEREAS, the Legislature supports the fundamental
 2   proposition that the minimum hourly wage paid to an employee
 3   should, at least, yield a basic "livable wage" to a person
 4   working 2,080 hours per year at the rate of fifty-two weeks a
 5   year and at forty hours per week;  and
 7       WHEREAS, this reflects the spirit and intent of the
 8   original minimum wage effected by the federal Fair Labor
 9   Standards Act of 1938, which provided that the minimum hourly
10   wage should be one-half the national average hourly wage paid
11   to non-farm, non-supervisory employees; and
13       WHEREAS, a weakness of this standard, based on a national
14   average, is that in areas of the country, such as this State,
15   where the cost of living is substantially higher, the federal
16   minimum wage falls far below the original spirit and intent of
17   a fairer minimum wage; and
19       WHEREAS, during the 1994-1998 period, the cost-of-living
20   differential for the State from the national average has been
21   variously estimated by reputable sources to be somewhere
22   between 25 and 40 percent; and
24       WHEREAS, this differential is commonly called the "paradise
25   tax" and the "price of paradise"; and
27       WHEREAS, the Legislature has in recent times provided for a
28   state minimum wage higher than the federal minimum hourly wage;
29   and
31       WHEREAS, in 1995, for instance, the federal minimum wage
32   was $4.25 per hour while the State's was a dollar higher at
33   $5.25; and

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                                  H.C.R. NO.            

 1       WHEREAS,  the present, 1999, federal minimum wage is $5.15
 2   per hour while Hawaii's remains at only $5.25 an hour, just ten
 3   cents ahead of the federal; and
 5       WHEREAS, a problem has developed over the years, both
 6   federally and locally, with keeping the minimum wage current;
 7   and
 9       WHEREAS,  in February 1995, the national average hourly
10   wage was, according to the U.S. Bureau of Labor Statistics,
11   $11.31, yet the federal minimum wage was only $4.25 instead of
12   the $5.65 that is one-half of $11.31; and
14       WHEREAS, similarly, at a 25 percent cost-of-living
15   differential, $5.65 multiplied by 125 percent would have
16   yielded a state minimum hourly wage of $7.06 in February 1995;
17   and
18       WHEREAS, using a more current figure for the nonsupervisory
19   national average hourly wage of $12.93 (November 1998), and
20   assuming a 25 percent higher cost-of-living differential for
21   Hawaii, Hawaii's minimum wage today should be $8.08 according
22   to the original federal intent; and
24       WHEREAS, there is an urgent need to always keep the minimum
25   wage current with inflation, and this is vitally important to
26   low-end wage earners who cannot afford even the slightest
27   erosion of their wages caused by yearly cost-of-living
28   inflation; and
30       WHEREAS, the way to achieve this is for this Legislature to
31   provide for an automatic annual cost-of-living adjustment to
32   the state minimum wage to effectively eliminate the periodic
33   controversy that arises each time the minimum wage becomes
34   unbearably eroded and legislation is needed to allow for annual
35   incremental increases; and
37       WHEREAS, an average annual rate of inflation of 2 percent
38   over ten years means that after ten years an employee is
39   receiving a paycheck worth only eighty cents to the dollar in
40   real dollars from ten years ago and for low-end wage earners
41   who spend virtually every penny of their income on retail
42   consumption and rent, this is the equivalent of raising
43   Hawaii's retail general excise tax rate to 24 percent from the
44   present four per cent at the end of the ten years, if the
45   minimum wage has not been raised annually to compensate for
46   inflation; and

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                                  H.C.R. NO.            

 1       WHEREAS, a common misconception is that raising the minimum
 2   wage has serious negative consequences for both employers and
 3   employees as well as for "the economy" in general, but many
 4   studies over the years indicate that the negative effects are
 5   inconclusive to negligible; and
 7       WHEREAS, an important general principle involved with
 8   raising the minimum wage is that traditionally an overall
 9   ripple effect eventually pushes up all employee wages, meaning
10   that raising the minimum wage in response to cost-of-living
11   inflation helps all the employees in the State of Hawaii to
12   keep up with the eroding effects of price and rent escalation
13   on the real value of paychecks; and
15       WHEREAS, other important benefits of raising the state
16   minimum hourly wage to be a "livable wage" are as follows:
18       (1)  A significant reduction in welfare payments from the
19            state general fund because a "livable wage" minimum
20            wage lifts some employees out of poverty and off the
21            welfare rolls;
23       (2)  It stimulates the local consumer economy by reducing
24            the profits derived from paying low wages and that are
25            taken directly out of the State by national and
26            transnational "big box" retail sales corporations,
27            thus increasing the amount of money kept in
28            circulation in the State's "local" economy;
30       (3)  It increases tax revenue because more income means
31            more income taxes paid as well as more retail general
32            excise taxes paid as the result of raising employee-
33            consumers' pay;
35       (4)  It reduces the likelihood of state "budget shortfalls"
36            because it reduces welfare pay-outs and increases tax
37            revenues; and
39       (5)  It is the ultimate "public-private partnership" where
40            the private sector complies with the social
41            responsibility of ensuring that all of its employees
42            receive a basic "livable wage" in these times when
43            employees are exercising maximum social responsibility
44            through paying a significant amount of their incomes
45            in taxes;
47    now, therefore,

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                                  H.C.R. NO.            

 1       BE IT RESOLVED by the House of Representatives of the
 2   Twentieth Legislature of the State of Hawaii, Regular Session
 3   of 1999, the Senate concurring, that although the time may not
 4   yet be ripe to legislate an increase in the minimum wage that
 5   is tied to the cost-of-living differential percentage between
 6   the State and the entire United States, the Legislature
 7   supports the goal of securing a "living wage" for the workers
 8   in the State of Hawaii;
10       BE IT FURTHER RESOLVED that certified copies of this
11   Concurrent Resolution be transmitted to the Chamber of Commerce
12   of Hawaii, the Director of Labor, the ILWU, the AFL-CIO, Small
13   Business Hawaii, and the Hawaii State Commission on the Status
14   of Women.
18                           OFFERED BY:  __________________________