Restaurants and food businesses weigh in on the minimum wage increase

What do local restaurants and food businesses think about increasing the minimum wage? Currently, a bill (SB331) in the Legislature seeks to raise the minimum wage, and it's drawing testimony from a variety of food businesses, most of them opposing the increase.

The food-related businesses that submitted testimony in opposition: Meadow Gold Dairies Hawaii, Tamura's Super Market, Ito En, Ken's House of Pancakes, Dole Food Co. Hawaii and Foodland Supermarket.

Debra Ching Maiava of Ken's House of Pancakes writes, "I am in favor of raises to our workforce to keep up with the cost of living. I am NOT in FAVOR of the TIMING of the Raises. The economy in Hawaii is just starting to regain a footing, and we as a business are only now starting to see a light at the end of the tunnel. It has been rough! After 7 years of a dire economy, business has picked up in the last 6 months only. Hopeful. But this is hardly cause for celebration as the economy is not yet Strong nor Stable. To impose a raise now would be to set all businesses back to 7 years ago."

Organizations representing food-business interests also submitted testimony against the measure: HFIA (Hawaii Food Industry Association) and the executive director of HRA (Hawaii Restaurant Association).

The HFIA argues, "Many entry-level jobs in the retail and food industry are for younger workers who may still be in high school. These younger workers do not need to have their wages increased. If industry is forced to raise these workers pay then they must also raise the pay of all of their employees along the labor chain which results in a huge increase in labor cost for the business and a corresponding increase in the price of the goods that are for sale."

Restaurants who submitted testimony in favor—Duke's Waikiki and TS Restaurants—do so with a caveat: that the tip credit also be raised so the wage increase does not go to tipped employees who already make more than minimum wage. As an example, the front of house staff at Duke's Waikiki makes $7 an hour plus tips; last year, their average hourly wage with tips was $21.42. The kitchen employees averaged $12.42 an hour, none of whom are at minimum wage. Duke's Waikiki writes, "The increase will not increase their wages and in fact may lower them because if we increase the wages of our tipped employees, we will be unable to continue to raise the rates of our back of the house support staff. We feel this is the has the opposite effect of the intent of this bill. Without a corresponding change in the tip credit, we will be giving an increase to the wrong group of employees."

Much of the supported testimony cites economists' conclusions. Want to know what the economists think? Check UHERO's (UH's Economic Research Organization) post: www.uhero.hawaii.edu/news/view/216