Hawaii SB 505: RELATING TO THE MINIMUM WAGE.

Bill Text

THE SENATE 
THIRTY-THIRD LEGISLATURE, 2025 
STATE OF HAWAII
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JAN 1 7 2025
A BILL FORAN ACT
RELATING TO THE MINIMUM WAGE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the economic 
vitality of the State is intrinsically tied to the success and 
sustainability of its small businesses, which form the latent 
structures of our local economy. Small businesses provide 
essential services and employment to residents, fosters 
community cohesion, and increases economic activity that is 
critical to the State's revenue and gross domestic product. The 
minimum wage serves as a critical policy lever for addressing 
income inequality, improving living standards, and ensuring that 
local workers are able to meet the high cost of living within 
the State. A thorough understanding of the multifaceted impacts 
that increasing the minimum wage will have on small businesses 
and the broader economic landscape is essential to forming a 
comprehensive State approach to mitigate any negative 
consequences of financial and income-based inequalities.
The legislature further finds that the increasing 
complexity of the State's economy requires a data-driven 
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approach to policymaking, ensuring that any changes to minimum 
wage policy are not only equitable to and supportive of workers 
but also recognize the operational realities faced by small 
businesses. The legislature also finds that the effects of 
minimum wage increases on businesses can vary widely depending 
upon business size, product type, industry sector, geographic 
location, and other socio-economic factors. Because these 
fluctuating market driven forces affect behaviors, investments, 
and revenues of businesses, there is a need for research and 
analysis that considers both the direct and indirect 
consequences of increasing the minimum wage on local businesses 
and the State's overall economy.
The legislature additionally finds that this type of study 
will provide a comprehensive and nuanced understanding of the 
dynamic interplay between the minimum wage policy and the health 
of
 small businesses, which will help ensure that future wage 
decisions are rooted in economic reality while remaining 
committed to the principle of fostering a fair, equitable, and 
thriving economy for all residents.
Accordingly, the purpose of this Act is to:
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(1) Require the department of business, economic 
development, and tourism's research and economic 
analysis division to:
(A) Conduct a comprehensive study to assess the 
impacts of minimum wage increases on small 
businesses and the overall economic health of the 
State; and
(B) Submit a report of its findings and 
recommendations, including any proposed 
legislation, to the legislature; and
(2) Appropriate funds to establish one full-time 
equivalent (1.0 FTE) research consultant position to 
conduct the study and prepare the report.
SECTION 2. (a) The department of business, economic
development, and tourism's research and economic analysis 
division shall conduct a comprehensive study to assess the 
impacts of minimum wage increases on small businesses and the 
overall economic health of the State. The study shall utilize 
both quantitative and qualitative analysis and research methods. 
The study shall examine:
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(1) The effect that increasing the minimum wage would have 
on:
(A) Hawaii based small business operating costs;
(B) Current hiring practices, employee retention, and 
the availability of part- and full-time positions 
in small businesses within the retail, food 
service, tourism, health care, and agriculture 
sectors;
(C) Business operations and human resources, 
including the impact on employee benefits, 
workers' compensation, retirement benefits, and 
medical coverage;
(D) Prices of locally produced agricultural products 
and other commodities in the State, and the 
effect on the State's agriculture industry as a 
whole;
(E) Imports and exports;
(F) Consumer prices, inflationary pressures, and 
local economic cycles in sectors that rely 
heavily on small businesses and how these effects
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may interact with broader economic trends in the 
State;
(G) Wage compression and wage differentials across 
positions within small businesses, and income 
distribution and economic equity within the 
State; and
(H) The competitive landscape for small businesses, 
particularly against large corporations;
(2) How small businesses adjust to wage increases through 
cost-cutting measures, price adjustments, or other 
operational cha