 Aloha, and welcome to What's on Your Mind Hawaii. I'm Tim Apachella. Recently political commercials from Governor E. Gay has been describing his support for the $15 per hour state minimum wage. Currently the minimum wage is $10.10 per hour or $21,000 per year. All proposed bills in the state legislature increasing the minimum wage to $15 failed to make it out of committee. For the 2018 legislative session, Governor's E. Gay ads were too little, too late. Today we look at Hawaii's minimum wage of $21,000 annual wage issues and compare that to yesterday's federal housing of urban development classification of an individual wage of $40,900 as a very low wage. And now here are those interviews. This is Tim Apachella, and I'm here with Nicole Wu, and she is a senior policy analyst for the Apple Seed Hawaii organization. Nicole, thank you very much for being with us and spending time with What's on Your Mind Hawaii. So, Nicole, tell me a little bit about your background and how you've been working on the minimum wage issues for, I don't know, how many years? I've worked in nonprofits for my whole career, and I've moved from place to place. Two of my jobs were with think tanks with economists that focus on labor and wages. So one of my first jobs was as a research assistant at one of these labor economy think tanks, and we worked on one of the first studies of living wage or higher minimum wage bills or laws. We were looking at Baltimore. We were looking at how it affected small businesses in the economy of Baltimore. So that was back in the 90s. And so on and off through my career I looked at the minimum wage, depending on what I was focusing on at the time. But it's been really amazing to see how the Fight for 15 movement has just changed the playing field the last few years across the country. Well, one of the first places that went to $15 was years ago in a city to south of Seattle called C-Tac, Washington, and it's a city basically that has mostly where the airport is and many of the airlines. And so that was the very first city that I think passed the 15. And so the question is we just recently had a Senate bill 2291 at the legislature. It didn't do well. Do you have any thoughts about maybe was that a bill too aggressive or maybe just your thoughts about why that bill didn't go any further? Well we did pass an increase in the minimum wage in Hawaii back in 2014 and it was raising the minimum wage in a few steps up to 10-10. That last step happened January 1st, 2018. So I think some legislators thought it was just kind of too early to look at this issue again. They felt like we didn't just pass an increase in the minimum wage. Folks like me, people who are trying to push for a higher minimum wage here said, you know, well actually, you know, 10-10, that was the last step. So starting today or January 1st, our minimum wage is going to start losing ground to inflation, which is what it had done before 2014. There hadn't been an increase in several years here. So we just wanted to make sure that the wage kept going up because, you know, with the highest cost of living in the nation, our workers really need to be paid more than 10-10 an hour. That's only $21,000 a year for full-time work. Everybody knows that you can't live on $21,000 a year in Hawaii. Well, given the fact that our rents are still going up and we still have an issue with the general excise tax that's been increased, which affects everything that we buy and sell, and we have a combination of higher transportation costs, which affect people who don't have cars that are trying to get to work and, you know, work for that $10 and 10 cents an hour, this is really putting a lot of pressure and strain. And I think for the first time, our population here on Oahu is actually decreased. And the question is, is there a correlation to that decrease in population to the fact that people aren't making it here on the island? Well, we do have the highest cost of living in the nation, high groceries, high gas, everything, high rents. And when you look at wages compared to the cost of living, our minimum wage is actually one of the lowest in the nation, just because our costs are so out of line. So, yeah, certainly some families are moving out of Hawaii because they can't make ends meet here, and those tend to be lower-wage families. They just need to go somewhere else where they can raise their children with more economic security. So here's a question. We know that the federal tax laws were just changed for companies, corporations, where they were being taxed at a 35% rate, and I believe that's come down to 20% rate. And the question is, that would free up a lot of their capital, a lot of their, basically, it's going to add a profit margin onto whatever they sell for goods and services. Have you seen any evidence of some of that money, and I hate to say the term trickle down, but have you seen any evidence of trickle down on either for wages or for other issues that corporations are engaged with? Well, some corporations have been saying, oh, well, now that we got their tax break, we're going to give workers a one-time bonus or raise our wages of $15 an hour. All the major banks in Hawaii have done that to $15 an hour. The question is whether or not they would have done that with or without the tax break because they were already raising wages here. We already know that we have a very low unemployment rate here in Hawaii, and that in response, employers do have to raise wages. And that's kind of what you hope. When unemployment goes down, it's sort of a supply and demand curve. That's when you put pressure on wages, and that's when working people can make more. That's how it works. So the corporations have been really good at kind of claiming that the tax break is what caused them to raise wages. But wages were already going up across the country. So maybe it helps a little bit, but we also are hearing that they're still laying people off. They're buying back their stocks and they're paying their CEOs more. So it's really hard to tell how much is trickling down. Well, that's a good point. And I know there's a few big box stores just down on Nimit Highway here. And they will argue that, yes, we pay minimum wage for a lot of our entry employees, but we also provide a full health benefit program and benefit health benefits. Have you heard that argument as an excuse or as a reason? I shouldn't say excuse, but as a reason why they kind of hold to that $10 to 10 cent wage. It is an argument here in Hawaii because we are the first state to have mandated employer provided health care. And it does cost them some money to provide health care for their employees. But we also know anecdotally, and I'm trying to find this in the data, that a lot of employers hold their employees down to 19 hours a week because it's only after that at 20 hours a week that they have to provide health care. So I know people who are holding to 19 an hour a week jobs, and they don't get health care. So some employers are doing the right thing, and then others are actually employing a lot of people at $19 an hour and not paying the health care. And those are the workers that you really have to worry about. They're making 10, 10 an hour, they're working two jobs, and they're not even getting health insurance. So we're going to hear smaller employers say that we can't absorb this kind of increase, like a big retail outlet like Macy's or whatever store, that we're just a small mom and pop operation. And that increase in wage would result in either a reduction of hours for employees or possible layoffs. Have you heard that argument and what other arguments might you have heard from small business owners? Oh, that is certainly a very common argument. When I was doing the research on one of the first living wage laws in the country back in Baltimore, part of my work as the research assistant was doing one-on-one interviews with these employers who had been affected by it. The law in Baltimore was just for government contractors. So we focused on janitorial companies and school bus drivers because they tended to hire people at minimum wage. And those owners said to me in general, I'm a small employer. My employees are like my family. I want them to be able to buy new shoes for their kids when they need them, take their wife out for her birthday, just have a few good things in life. But if I am trying to wage us on my own, I'm going to get knocked out by my competitors. But if everybody has to raise their wage at the same time, it's an even playing field. We all have to adjust to it. And it's not a competitive disadvantage because we're all raising it at the same time. So they saw it as we need to have the law make the wage go up because as a small business owner, I can't afford to do it on my own. So that was a really interesting insight to hear from them, that they want their employees to make enough. Another thing to remember is that workers are also customers. And small businesses need people in their communities who can afford to buy their products. And if workers are struggling several part-time jobs at 10-10, they're not able to spend money at these local businesses. And that's the reason that Henry Ford, back in the day, chose to pay his workers more money. He said he wanted it to be that all of his employees could afford to buy one of their cars. And I think that's one part of the equation that a lot of businesses sort of forget when they're thinking about the wages that they're paying their employees. I spoke to one employee who works for a larger retail outlet that is paid minimum wage. And this employee made it very clear to me that they are very aggressive and proactive to let them know about social services either provided by the federal government or by the state or by the city, be it for SNAP program, supplemental nutritional assistance program, or other rent assistance programs, as almost the orientation to employment. I find that actually incredible to believe in whether or not that really does occur. Oh, yeah, Walmart got some pretty bad publicity about it a few years ago because somebody did leak their orientation forms. And it included applications for food stamps or SNAP, as they're called now. And the outrage was over the fact that these low wages are basically being subsidized by taxpayers because these employers are not paying enough for a family to live on, so they end up having to take advantage of all of these various government benefits. So raising the minimum wage is a way for people to get off of government dependence. And that's a way for the state to save money. So we had this bill 2291, I believe it was. It didn't go anywhere. Is there any sense of why? I think before this interview you had mentioned there were nine separate wage increase bills in the legislature for 2018, and none of them went through. Any sense as to why that might have been the case? And certainly it didn't even get out committee for 2291. Well, there are always a number of minimum wage bills in the legislature, it seems, just because a lot of legislators want to have their own bill. Sorry. Some of the bills actually were to eliminate the subminimum wage for workers with disabilities. And one of those has survived. And it looks quite good that it will probably pass. And that's great for workers with disabilities to be paid the same minimum wage as the rest of us. But the ones to get us up to maybe $15 an hour or otherwise raise the regular minimum wage, only one bill got a hearing. That was SB 2291, like you said. The Labor Committee hearing was actually packed. There was overflow into the hallway. There was a lot of very moving testimony in support of the bill. There were also business owners saying that they didn't like the bill. But there were young adults who said that they are having trouble paying their college tuition and paying their rent and buying enough food to eat. So it was very moving testimony from people who really say that they need an increase in the wage that 10-10 is not enough. But as I stated a little bit earlier, it seems like some legislators just weren't really ready for it yet. Because they felt like 2014, the last time the wage was raised, was really recent. Maybe in their minds it does seem really recent. But in our minds, the folks who've been working to raise the wage, now that the increases have stopped in 2018, we have to pass a new law to raise it again in the future, or else these workers are just going to be stuck at $21,000 a year. You had mentioned earlier about data. And you've been looking at data for years. There's an old Mark Twain saying there's lies, damn lies, and statistics. So how are some of this data, or some of these survey reports, being used against the argument of a minimum wage, a livable, sustainable minimum wage? Well, the minimum wage is actually one of the most studied topics in economics, at least over the last 20, 25 years. And most of the studies look at real world changes. Because often you'll have a state like Pennsylvania raise the minimum wage, and then New Jersey doesn't. And you have all these towns that share a border. So you can actually look at businesses on both sides of the border. So there have been a lot of studies like that. And every few years, a new meta study comes out that looks at 100-something minimum wage studies that have come out over the last few decades. And you smush these all together. And in the end, it shows that there's pretty much no effect on the number of jobs in the economy. Because kind of like what I was saying before, employers get more customers. Everybody's sort of the boats all rise together. And so we don't see the type of job losses that the business community often warns us will happen. It just hasn't been happening in real life. There was one study that came out last summer in Seattle, which has a law to raise their wage to $15. It's not there yet. There were two studies that came out the same week. Looking at what had happened up through 2016, when the wage went up to $13 an hour. The first study was done by the University of California at Berkeley. And it was just like pretty much all the other wage minimum wage studies. It showed that this slow increase in the minimum wage in Seattle was benefiting workers. They were taking home more money. It got almost no media play. It just sort of fit in with all the other studies. A few days later, the University of Washington put out another study, which claimed to show job losses. And that got all over the media. I heard from legislators here in Hawaii, oh, tell me about this new study. So economists have looked at it. And it has some issues. The University of Washington study, for example, only looked at employers with a single location in Seattle. That means they didn't have any chain restaurants, any retail chain. So no Starbucks, no Subway, no McDonald's, no Walmart. None of those types of stores were included in their study. It's estimated that was about 48% of workers who should have been in that cohort of workers at or below $13 an hour weren't in the study. So that's a huge flaw. That study also found that there was this huge increase in wages above $19 an hour, which just doesn't make a huge amount of sense. So it just seems like there must be some sort of problem in how they design their study. And so some people who originally supported the bill, some economists, have actually rescinded their support, saying, oh, it looks like there are some flaws in the study and we need to go back and take a look at the numbers. So I have a feeling that both University of Washington and Berkeley will continue looking at Seattle. But that was just one study showing some job losses. Again, the vast majority of hundreds of studies don't show job losses. As long as you raise the wage in a nice step-by-step manner so employers know it's coming, it seems fine. What's an appropriate step increase? Is it $1 an hour? Is it $2 an hour? What's too much and what's too little? That actually hasn't been studied. And that is one of the unknowns. Most of the bills that we've seen have been maybe about $1 an hour, maybe a little more. And it's going to be interesting to watch a lot of these bills and laws. There are other states, California, DC, and New York that are raising their wage to $15 an hour. Of course, there's cities like Seattle. So we have to keep watching them. But we know here in Hawaii, we had steps up to 10-10. I think in 2014 to 2018, it went up in three or four steps. And our businesses are booming. We have low unemployment. Our economy's done fine. So it doesn't seem like it had the negative effects that people had been warning about back in 2014. Yeah, an increase from 9 and 1 quarter, I think, to 10-10. Or was it even lower than that? It had been at, I think, 775 or something, and then went up to 8-something, and then 9-something, and then 10-10. Well, Governor Ige just recently mentioned that he would support a $15 an hour bill. But the legislature is over as far as this bill is concerned. So a little too late, I suppose. Any messages for the legislature in 2019 to take up new bills, and what would you recommend? Or what would you say to them if you had an opportunity to get in front of the podium, and you had your 35 seconds in front of the entire state legislature? Well, I know that legislators have a lot of things that they're worried about. And one of the biggest ones is our homelessness crisis and our affordable housing crisis. That ties into wages. There are all different reasons that people are homeless. But one of the main reasons that people are evicted is that they just can't make their rent. And at $21,000 a year, we all know that's just not enough. So we have the highest cost of living here. We know that people can't make ends meet. And one way to do so, one way to help people make ends meet is to raise them in the wage. So we hope that Hawaii will match up with other high-cost states like New York and California and DC and pass a law to raise the wage. Okay, well, Nicole, I want to say thank you so much for appearing on What's On Your Mind Hawaii. Thank you for sharing your thoughts and your opinion and your research that you've done for all these years. And this is a very important topic and I appreciate it. Tim Appichella with Think Tech Hawaii, aloha. That's how we do it. Hi, I'm Ethan Allen, host on Think Tech Hawaii of Pacific Partnerships in Education. Every other Tuesday afternoon at 3 p.m., I hope you'll join us as we explore the value, the accomplishments and the challenges of education here in the Pacific Islands. Hey, aloha, Stan Energyman here on Think Tech Hawaii where community matters. This is the place to come to think about all things energy. We talk about energy for the grid, energy for vehicles, energy and transportation, energy and maritime, energy and aviation. We have all kinds of things on our show, but we always focus on hydrogen here in Hawaii. Because it's my favorite thing, it's what I like to do. But we talk about things that make a difference here in Hawaii, things that should be a big changer for Hawaii. And we hope that you'll join us every Friday at noon on Stan Energyman and take a look with us at new technologies and new thoughts on how we can get clean and green in Hawaii, aloha. This is Tim Appichella for Think Tech Hawaii for What's On Your Mind Hawaii. And today I'm at Capilani Park. I'm here with Nate Hicks. And Nate Hicks is the basically director of living organizer of Living Wage Hawaii. And this group is dedicated to trying to bring a higher minimum wage here to Hawaii. So Nate, tell me why you're here today specifically. Don't let me answer for you. You answer it. Yeah, it's really important. We all know that being able to afford to live here in Hawaii is incredibly difficult. Half of families actually are unable to meet their basic needs. And this is at a time with record low unemployment, everybody can find a job. They just can't find one that pays well enough to be able to afford to live here. And that is a direct result of our worst in the nation minimum wage. Minimum wage workers can afford less of their basic needs than anywhere in the nation. And it's important we raise the minimum wage to guarantee that all workers can just at least afford to live here. What kind of conditions do you hear from people that are making minimum wage? What kind of specific challenges? Because when I hear they can't afford to live here, I mean, I'm not gonna say that's not important statement, but it doesn't have an impact to my emotions. It doesn't have an impact to what does that really mean? So kind of go in the detail, what does that really mean? Yeah, I mean, people having to work two or three jobs just to make ends meet. That means kids at home are by themselves all day after they come home off the school bus. That means that people are skipping meals. That means people are living in their car. Obviously we know homeless rate is the highest in the nation, but it's not just the homeless, but it's everybody. And the issue as well is everybody's struggling. Everybody's stressing out about trying to make ends meet. And so it's really important that we make sure we just give everybody the opportunity to afford their basic needs. So there was a Senate bill, Senate bill 2291 in the legislature. Tell me what happened to that bill and why do you think it didn't progress? What's your thoughts on that? Yeah, so Senate bill 2291 was one of the many minimum wage bills to raise the minimum wage in the state capital. It passed its first chamber and then was not scheduled to hearing by Senator De La Cruz of the Ways and Means Committee. I can't say for certain what reasons they really killed the bill, but I just don't think they understand how important this is to the entire economy. All jobs are paid lower than what they need to be because our floor is so low. With entry-level workers getting paid near the bottom of the entire nation, all jobs are really suffering because of it. I think if they understood that and how raising the minimum wage gave us all the opportunity to survive, they would schedule it and pass it tomorrow. So making this very clear to them that this bill would impact everybody and give all of us a better chance to live would easily get them on board. Well, it seems to me in the past the legislature and the governors, Governor Abercrombie, Governor Ege, were supportive of a higher minimum wage. So was there something specifically written in that bill that was a poison pill, if you will, that just was so unattractive they couldn't live with it? No, this is just a straightforward raising the minimum wage bill. I'm as flabbergasted as well. It seems pretty simple. This is a state legislature that's fully democratic party. And if they wanted to pass it, they could. Unfortunately, with New York, with California, with DC and several other cities raising their minimum wage up to 15 and even Republican states like Maine and Arizona, they're raising that up to $12 an hour for us to be stuck at 10-10. Something's going on and we need to make sure that the people know it and that we can start voting for candidates and legislators that do support raising the minimum wage. Before it graduated on January, 2018 to 10-10, do you remember what the increment was just below that? Was it 9-25 or? I think 9-25 is right, something around there. And then before that, eight-something and then 7-75 and then 7-25. So 10-10 is the minimum wage. Now what about employers that said, well, yes, we're paying 10-10 and maybe that's a little lower than the rest of the country given the high cost of living here in Hawaii. But you get our medical benefit package. Yeah, and the medical benefit package is important and it's necessary. Unfortunately, it's not enough to actually allow people to meet their basic needs. They need to put a roof over their head. They need to eat. They need to get to work. And so healthcare is a necessity. We all need it, but we need everything else or we need all of our other basic needs too. When I think of people working at minimum wage, I think that a lot of times because of the high cost of housing, the high cost of rent, they're not able to live close to where their employment is. So that means they're traveling long distances somewhere else on the island. And I'm wondering what impact that has to people that are making minimum wage. Do you hear from your membership about that issue at all? Yeah, I think we all know. I mean, you go and see traffic on the West side. I mean, people are driving hours each way just to be able to find a job that works for them and might not even work for them. So people are struggling. You have children obviously coming home to parents who are still in their commute. This issue is really hurting all people. And yeah, time is a huge factor for all of us. Well, it's time, it's a stress, but also I'm thinking what the impact of further erosion of costs for gasoline, for depreciation of the car, for insurance. I mean, those are other costs that keep eroding into what is already a non-livable wage of $10.10 an hour. So I'm just wondering if that impact kind of works its way into the discussion or the conversation. Again, the livable wage as calculated by the Hawaii government actually, DBET just came out with a study, a Department of Business, Economic Development and Tourism, that livable wage is 16. At 10.10 is far too low. And so it's extremely necessary that we raise it up. All these things are counted towards just making ends meet. It's very baseline. These aren't saving up to go on vacation or even enough to save up for retirement. 40 hours a week, full-time work. We are less than two-thirds of the way there. So all of these things are really putting a strain on our families. So what are the causes or what are the symptoms of why we have a $10.10 minimum wage and worse yet, given our low employment, employers are able to get away with it? Is it just because everyone wants to live in Hawaii and have an Hawaiian experience and therefore that's the prevailing rate? Is it a supply and demand kind of issue or what do you think it is? I mean, it's clear that the minimum wage is the floor. We actually have people leaving the state more than people are coming in. We have the worst rate of people leaving on the entire nation and this is at a time with low unemployment. So because the minimum wage is so low, the corporations are able to get away with it. Again, people are leaving the state and so it's very important that the government stand up and say, no, our people are worth more than this. They are worth enough to actually afford their basic needs. Does your group Living Wage Hawaii have any data about what employers are out there that actually do start at a minimum wage versus a higher minimum wage? Seems to me that some of these retail outlets are actually just above minimum wage, but not really a whole lot. Do you have any data about that? I don't know, but I do know that 40% of jobs pay less than a livable wage. I don't know the actual number of corporations, but this is a rampant issue. All of the people in Hawaii are hurting negatively because of this. Our workers are being exploited. They are unable to find a job that can afford them the opportunity to live here. And so if we can take that group and raise them up to at least an entry-level, livable wage position, all of the rest of the jobs can rise up above. Well, there's a livable wage and then there's a minimum wage. What was the Senate bill proposal? Was it $15 an hour? Senate bill was going to push it up to $15 an hour, which still isn't enough, unfortunately. That is a great step and that's why we supported the bill for sure. But once we get there, we need to make sure we also account for our high cost of living, the highest in the nation. If you had an opportunity to stand in front of the legislature and you were given 35, 40 seconds to talk to all the representatives and all the senators, even if the governor was there, what would you say? I would say if we want to provide a future for not only ourselves, but also for our cakey, it's incredibly important that we give all workers the opportunity to at least survive and make a living here. If we do that, all jobs around the state will increase and everybody will benefit. This bill is going to help businesses, it will help employees, it will help all families, it will help everybody. And so as long as we continue to allow people to be exploited at the extreme level that they are, everybody is not gonna be able to afford to live here. So passing this bill is incredibly necessary. Okay, well, Nate, Nate Hicks with Living a Wage Hawaii. I appreciate you taking the time to share your sentiments and the issues at hand here and they're important issues. So I hope the next legislative session is gonna go a lot better for this issue. So thank you so much for coming on the show and spending your time. I'm Tim Appachella for What's on Your Mind Hawaii, Aloha. Thank you, welcome back. And that's our show for this week. Please join us in two weeks for that I believe that's May the 8th and Aloha.