{"id":865,"date":"2020-04-17T22:00:18","date_gmt":"2020-04-18T03:00:18","guid":{"rendered":"http:\/\/thefilipinochronicle.com\/backup\/?p=865"},"modified":"2020-05-02T18:58:49","modified_gmt":"2020-05-02T23:58:49","slug":"this-is-no-time-for-a-minimum-wage-hike","status":"publish","type":"post","link":"https:\/\/thefilipinochronicle.com\/backup\/2020\/04\/17\/this-is-no-time-for-a-minimum-wage-hike\/","title":{"rendered":"This Is No Time for a Minimum-Wage Hike"},"content":{"rendered":"\n

By Keli\u2019i Akina
<\/strong>
If we want Hawaii\u2019s economy to recover from the coronavirus shutdown, we have to put aside any possibility of a minimum-wage hike.

As I write this, Hawaii is on Day Six of a statewide lockdown in response to the COVID-19 pandemic. Hotels have closed, restaurants are empty, rental cars are sitting idle in the Aloha Stadium parking lot, airline flights have been canceled, and almost 100,000 thousand laidoff workers are swamping the state unemployment office.

With time, our economy will recover. But when the conversation turns to helping those who are struggling, it\u2019s inevitable that a minimum-wage hike will be proposed.

Before the shutdown, House Bill 2541 was sailing through the Hawaii Legislature. In the name of helping working families, it proposed gradually increasing the state minimum wage to $13 an hour by 2024.

Unfortunately, few policymakers have stopped to look at the data on minimum-wage hikes. At best, they simply redistribute the wealth among low-income workers; at worst, they result in lower incomes as employers cut hours and families have to deal with higher costs generated by the wage hike. In other words, minimum-wage hikes are a poor tool for helping low-income workers.

A 2018 University of Washington study found that increasing Seattle\u2019s minimum wage to $13 an hour resulted in the loss of about 5,000 jobs. Because job hours were cut by about 9%, the remaining workers averaged a pay cut of about $125 a month.

Sam Sonson, a retired Filipino businessman in Hawaii, told me a minimum wage hike is \u201cthe worst thing that can happen\u201d for local businesses.

\u201cThe thing they don\u2019t tell you about the minimum wage,\u201d he said, \u201cis that it affects the small business so badly. Some of them are hanging on a cliff, and they\u2019ll just go bankrupt. And the ones who are doing OK, they just cut down the hours of their workers or lay them off.\u201d

Minimum-wage hikes can be especially bad for the restaurant industry. A 2017 study of restaurant closings in San Francisco found that increasing the minimum wage to $13 an hour led to the death of many mid-range restaurants. For every dollar the minimum wage went up, there was a 4 to 10% increase in the likelihood of restaurant closings.

There is never a good time to raise the minimum wage, but when businesses are trying to recover from a crisis, a wage increase can be catastrophic.

As said Jacob Vigdor said at a March 24 webinar sponsored by the Grassroot Institute of Hawaii, \u201cIn a world where everybody has a job, everybody wants a higher wage. In a world where nobody has a job, the first thing that you want is a job.\u201d

Vigdor, a professor at the University of Washington, directed the team that studied the effects of Seattle\u2019s minimum-wage increase. Asked about Hawaii, he said we don\u2019t know how long it will take for tourism \u2014 Hawaii\u2019s largest economic sector \u2014 to recover.

\u201cWhen the minimum wage is higher and you\u2019re running a business that all of a sudden takes a big hit \u2026 your need to pare back your workforce is a lot stronger,\u201d he said.

Eventually Hawaii\u2019s lockdown will end, but our policymakers are going to be under a lot of pressure to help those who lost their jobs and wages. Some will view increasing the minimum wage as an easy quick fix. Instead, it will harm the ability of businesses to employ workers and increase Hawaii\u2019s already-high cost of living for everyone.

If state policymakers want to revitalize our economy, they need to ease the burdens on local businesses, not add to them. This is no time for a minimum-wage hike.<\/p>\n\n\n\n

\n\n\n\n

KELI\u2018I AKINA, Ph.D.<\/strong>,is president and CEO of the Grassroot Institute of Hawaii.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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