THE SENATE                           S.R. NO.              S.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                    SENATE  RESOLUTION


 1        WHEREAS, the spirit and intent of the original minimum
 2   wage effected by the federal Fair Labor Standards Act of 1938
 3   was that the minimum hourly wage should be one-half the
 4   national average hourly wage paid to non-farm, non-supervisory
 5   employees; and
 7        WHEREAS, Hawaii's minimum wage is calculated using a
 8   standard based on a national average which does not take into
 9   account the cost-of-living differential between the State and
10   the national average; and
12        WHEREAS, the legislature supports the fundamental
13   proposition that the minimum hourly wage paid to an employee
14   working forty hours per week in the State should yield a basic
15   "livable wage"; and
17        WHEREAS, advocates of raising the minimum wage argue that
18   raising the state minimum hourly wage to a "livable wage" will
19   raise employees out of poverty and off the welfare rolls thus
20   resulting in a significant reduction in welfare payments from
21   the general fund and an increase in income taxes paid; and
23        WHEREAS, the business community opposes raising the
24   minimum wage arguing that it will adversely affect the business
25   climate in Hawaii by:
27        (1)  Making it costlier to hire entry level workers
28             resulting in fewer positions available; and
30        (2)  Creating pressure to raise wages throughout the
31             affected business to account for differences in
32             experience and skill level, resulting also in an
33             increase in benefits linked with wage levels; 
35   and
37        WHEREAS, the minimum wage is traditionally viewed as a
38   starting wage and most employees starting at minimum wage will
39   earn higher wages within twelve months of beginning their
40   employment; and

Page 2                                                     40
                                  S.R. NO.              S.D. 2

 1        WHEREAS, in order to make an informed decision on the most
 2   prudent policy regarding Hawaii's minimum hourly wage, the
 3   legislature must evaluate the most recent data relating to the
 4   interplay between Hawaii's economy and the minimum wage; now,
 5   therefore,
 7        BE IT RESOLVED by the Senate of the Twentieth Legislature
 8   of the State of Hawaii, Regular Session of 1999, that the
 9   University of Hawaii Center for Labor Education and Research is
10   directed to conduct a study and evaluation of the interplay
11   between Hawaii's economy and the minimum wage including:
13        (1)  The impact of raising the minimum wage on wage
14             earners as well as employers, including data on how
15             past increases in the minimum wage have affected
16             other wages in Hawaii businesses; 
18        (2)  The demographics of employees earning minimum wage,
19             including age, gender, and length of time working for
20             minimum wage;
22        (3)  An evaluation of the real value of the current
23             minimum wage as compared to the real value of the
24             minimum wage when it was established in 1968, and the
25             best method to determine a basic minimum "livable
26             wage" for Hawaii's wage earners based on the cost-of-
27             living in Hawaii compared to the nation as a whole
28             and other pertinent factors; and
30        (4)  Current wage structures within Hawaii-based small
31             businesses, including whether small businesses tend
32             to use the state-established minimum wage or a
33             company-established minimum wage, and the highest
34             earning level within the small business;
36   and
38        BE IT FURTHER RESOLVED that this study be submitted to the
39   Legislature at least twenty days prior to convening of the
40   Regular Session of 2000; and
42        BE IT FURTHER RESOLVED that a certified copy of this
43   Resolution be transmitted to the President of the University of
44   Hawaii.