HONOLULU — Hawaii Governor David Ige on Wednesday signed legislation raising the state’s minimum wage to $18 an hour by 2028.
The $18 minimum would be the highest amount among the 50 states and the District of Columbia. However, some states automatically increase their minimum wage when the cost of living increases. California, which currently has a minimum wage of $15, could have a higher wage in six years given inflation.
Hawaii’s minimum wage is currently $10.10 per hour. The new law increases the rate in increments over the next few years, starting with $12 on October 1.
Hawai’i currently has the highest cost of living in the country, and that number is even higher in Kaua’i.
A state report estimates that Kaua’i’s “self-sufficiency wage” — the amount needed to cover basic housing, food, transportation and other costs — is $40,830 for a single adult . A person working at the current minimum wage of $10.10 an hour would earn only $21,008 a year.
According to this report, a person working full time in Kaua’i would need to earn $19.62 an hour to pay for the cost of living.
The bill makes the earned income tax credit permanent and refundable, helping low-to-moderate income workers lower their taxes and potentially increase their tax refund.
The Hawai’i Tax Fairness Coalition estimates that the policy would increase the incomes of 5,452 families by an average of $420 while generating $2,840,179 in economic activity for Kaua’i.
Ige also signed a measure providing for one-time tax refunds. Individuals who earned less than $100,000 in 2021 and couples who earned less than $200,000 will receive $300 through tax exemption. For a family of four, the payment could total $1,200.
Individuals who have earned more than $100,000 and couples who have earned more than $200,000 will receive $100 per exemption.
The bill also puts $500 million into the state’s rainy day fund and sets aside $300 million for state employee pensions.
Progressive organizations Raise Up Hawai’i, YES HI Tax Fairness and Hawai’i Appleseed applauded the bill’s signings in a statement Wednesday.
“This landmark legislation represents an important and significant step toward transforming our economy so that it works for everyone,” said Gavin Thornton, executive director of Hawai’i Appleseed. “But there’s still a lot to do.”
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Garden Island Newspaper reporter Guthrie Scrimgeour contributed to this report.
