by Paul Harleman
Grassroot Institute of Hawaii
February 25, 2014
Spurred on by President Obama’s State of the Union, both the Hawaii State House and Senate have introduced legislation that would increase the current minimum wage from $7.25 to $10.10 and adjust future minimum wages to inflation. Given accelerating cost of living and poverty rates, a minimum wage increase is often seen as a viable solution to address the rising level of social and economic inequality in Hawaii. Because of the debate’s “populist” nature, facts and empirical evidence are often overlooked. The legislature and media should consider the following four key considerations: Raising the minimum wage will benefit less than 4%of low-income working families; the current proposed minimum wage raise increases the costs of low-skilled labor by 39%; raising the minimum wage will not lift working families out of poverty; and raising the minimum wage is expected to reduce teenage employment.

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