HOUSE BILL TO SUPPORT WORKING FAMILIES CONTINUES TO MOVE THROUGH THE LEGISLATURE

Measure includes tax benefits, minimum wage increases as part of joint legislative 
package to tackle cost of living in Hawaiʻi

Honolulu, Hawaiʻi –A House bill that would benefit working families by providing tax benefits and increasing the minimum wage was passed during a joint hearing of the House Committee on Labor & Public Employment and the Committee on Finance today.

HB 2541 HD1, titled Relating to Helping Working Families, would make the state earned income tax credit refundable and permanent, and increase the refundable food/excise tax credit. In addition, the bill would increase the minimum wage rate to $11 per hour beginning on 1/1/2021, $12 per hour beginning on 1/1/2022, $12.50 per hour beginning on 1/1/2023, and $13 per hour beginning on 1/1/2024.

Finance Committee Chair Sylvia Luke said this bill is an important part of the joint economic package of bills introduced this session by the House and Senate and supported by the Ige Administration to address Hawaiʻi's cost of living obstacles for working class families and individuals.

"In this package of bills which deals with affordable housing, child care and minimum wage, what we are trying to do is take care of the working families," said Representative Luke

Representative Aaron Ling Johanson, Chair of the Labor & Public Employment Committee, said this one bill is not meant to be the singular fix for all of the root causes of Hawaiʻi's high cost of living.

"This is a minimum wage increase; bottom line: under this proposed legislation, workers are going to make more income. Additionally, the less talked about, but very important feature of this particular legislation is the $70+ million in new tax relief for all working families and individuals. The

legislation increases wages and delivers assistance to the many workers and working class families that need help now in a net beneficial way," said Representative Johanson. 

The joint House-Senate-Governor proposal is designed to preserve existing worker benefits for the most economically vulnerable workers.  It ensures that minimum wage workers are less likely to have their employer paid for health care premiums compromised if the employer reduces hours to compensate for a mandated wage increase that they cannot afford. The proposal seeks to increase wages without inadvertently reducing an employee's hours or present benefits.

The bill package tackles the issues highlighted in the Aloha United Way sponsored report, "ALICE: A Study of Financial Hardship in Hawaii." The ALICE (Asset Limited, Income Constrained, Employed) report describes the economic hardships facing many working individuals and families in Hawaiʻi. According to the report, after allocating monies to pay for expenses such as housing, child care, food, taxes, health care, and transportation, a family of four needs to earn roughly $77,000 a year simply to survive.

The bill now moves to the full House for second reading.

Read more at: Working Class Economic Support Package, Star Advertiser Editorial: Working Families Need More Relief.