Hawaii lawmakers have unanimously voted to increase the minimum hourly pay rate from 7.25 per hour to $10.10 per hour by 2018. For many, this pay increase is held as a victory for low-income workers. Across the nation, fast food workers have protested the low minimum wage in the form of strikes declaring that $7.25 is not enough to cover the cost of living.
As a student worker, I can relate to the low wages and the difficulty making ends meet. However as the rate of pay rises, so will the cost of living. Businesses will need to increase prices of their products in order to compensate themselves for the increase in pay they have to pay their workers. Although paying minimum wage employees $2.85 more an hour may seem insignificant, the numbers add up. One hundred employees at eight hours a day costs the company $2,280 more every day and about $820,000 a year.
How will this affect employees already making more than the $10.10. (payrate)\7.25=X\10.10 seems like an acceptable rate of compensation right? The truth of the matter is most employees will be lucky if they receive a pay raise at all.
So is a pay increase really what we need in this situation? Or are there other solutions that also need to be explored? Wouldn’t be better to cut the cost of living instead of just raising the pay?
By Justin Saito.