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Minimum wage is going to $12 in October. Then $14 in 2 more years. $16 two years after that. And $18 by 2028. At ~6.5%/year, these bi-annual raises are lower than our current inflation rate. Although nobody knows what future inflation will be, it's safe to say it's going to be higher than the 1.6% (average) we've been accustomed to for the last decade.
All employed individuals in this state should be taking home more than $58/day regardless of what they do. Considering our cost of living it's nuts how low our current minimum wage is. Imagine showing up to work 40 hours every week on time and only pulling $1,200/mo. It costs that much in rent/utilities alone for a single room in a house shared with 3 roommates. I feel for the business owners that have to squeeze to make these increases work. And we'll all be paying a little more to support the 90,000 minimum wage workers. But something has to change.
And we'll all be paying a little more to support the 90,000 minimum wage workers.
Personally - I don't care how much more I'm spending - but it certainly won't be "a little more".
This isn't an impact to 90,000 minimum wage workers - almost 200,000 Hawaii workers make under $18/hr. For instance, an entry level Bank of Hawaii teller makes roughly $14.50/hr. Most Janitors do not make $18/hr (but typically more than minimum). And once the minimum wage worker is making $36,000 a year - you certainly aren't paying teachers $50,000 a year (or pretty much anyone with a college degree). This lifts payroll costs pretty much across the board - and prices will certainly go up - a lot.
The people who will feel those much higher prices - are going to be - the newly minted $18/hr folks up to at least $25/hr with the rising tide of wages.
And the places that can absorb these wage hikes are your big box stores/McDonald's etc who have buying power - your local eateries - mom and pop stores - in my opinion will have huge challenges competing and many will eventually disappear. I think people would be surprised the average restaurant owner in Hawaii makes roughly $32,000 a year or $16/hr. (actually less than that as they are likely working over 40 hours a week)
I'm not sure where you're getting your data. FHB and Bankoh raised their minimum wage to $15/hour for all employees 4 1/2 years ago. I can only imagine that base $15 has increased since the end of 2017. And I'm sure all the other major banks are doing the same to be competitive. Bank of America while not a local bank, is paying $22/min. And that's for all staff.
I'm also not sure why you're stating most janitors don't make $18/hour now. The mandated increase to $18 is in 2028. 6 years is a VERY long time from now; any comparison to today's compensation is irrelevant.
And there is zero evidence in the link you sent regarding the $30k annual compensation for a restaurant owner. While anecdotal, I have a decent sampling base of over 15 restaurant owners as I have a lot of close friends in the restaurant business. Some are franchisees, some are private operators. The average annual NOI is nowhere near $30k. No restaurant owner would be in the game if that was what they really get paid. Between the group it would vary between $80k on the low end all the way up to $1.5M. These are average years. But sure there are definitely a lot of ultra small owner-operated restaurants (<5 staff) where owners report very low income due to high ratio of cash receipts. In some cases owners only accept cash. These ultra small business owners are going to skew any data you'll conveniently find on your 8 second Google search.
Prices will go up for sure. It's the nature of just existing in any society. I just disagree the minimum wage increases will have a dramatic impact on prices we all pay for goods and services
While anecdotal, I have a decent sampling base of over 15 restaurant owners as I have a lot of close friends in the restaurant business. Some are franchisees, some are private operators. The average annual NOI is nowhere near $30k. No restaurant owner would be in the game if that was what they really get paid. Between the group it would vary between $80k on the low end all the way up to $1.5M. These are average years.
The owners of those mom and pop restaurants you see in the strip malls of Kaneohe, Pearl City, Aiea, Ewa Beach, and on and on are definitely not making $80K a year. Not even Subway owners on the island are making $100K.
I don't know a lot of people in the restaurant business - but I am very close friends with the owner of what I would describe as a neighborhood sports bar - several tables inside and outside - bar seating - food - also substantial food to go open 7 days a week 11am to 1am (open earlier in football season) and while some dead times exist - I'd characterize it as a fairly busy operation high traffic area 7 days a week that is at times standing room only. He clears roughly $100K a year. Again, a substantial operation with high margin liquor sales.
And what you are also leaving out is the outer islands that don't have the traffic Oahu has - so those mom and pop places on Kauai, Big Island, and Maui also bring down the averages.
Sure - I'm sure Morton's - Duke's - Morimoto's - Hy's all do very well - but I consider those the outliers.
Let's go with Ziprecruiter - most people know that -
Average business owner (all businesses): $48,558/year
The owners of those mom and pop restaurants you see in the strip malls of Kaneohe, Pearl City, Aiea, Ewa Beach, and on and on are definitely not making $80K a year. Not even Subway owners on the island are making $100K.
I don't know a lot of people in the restaurant business - but I am very close friends with the owner of what I would describe as a neighborhood sports bar - several tables inside and outside - bar seating - food - also substantial food to go open 7 days a week 11am to 1am (open earlier in football season) and while some dead times exist - I'd characterize it as a fairly busy operation high traffic area 7 days a week that is at times standing room only. He clears roughly $100K a year. Again, a substantial operation with high margin liquor sales.
And what you are also leaving out is the outer islands that don't have the traffic Oahu has - so those mom and pop places on Kauai, Big Island, and Maui also bring down the averages.
Sure - I'm sure Morton's - Duke's - Morimoto's - Hy's all do very well - but I consider those the outliers.
Let's go with Ziprecruiter - most people know that -
Average business owner (all businesses): $48,558/year
You strike me as too intelligent to use ‘averaging’ in this application … you know there are huge numbers of business licenses out there operating out of spare bedrooms …
You strike me as too intelligent to use ‘averaging’ in this application … you know there are huge numbers of business licenses out there operating out of spare bedrooms …
I used Ziprecruiter specifically to weed those out -
So - your position is business owners regardless of island are swimming in cash - what is your point - what number do you have?
The owners of those mom and pop restaurants you see in the strip malls of Kaneohe, Pearl City, Aiea, Ewa Beach, and on and on are definitely not making $80K a year. Not even Subway owners on the island are making $100K.
I don't know a lot of people in the restaurant business - but I am very close friends with the owner of what I would describe as a neighborhood sports bar - several tables inside and outside - bar seating - food - also substantial food to go open 7 days a week 11am to 1am (open earlier in football season) and while some dead times exist - I'd characterize it as a fairly busy operation high traffic area 7 days a week that is at times standing room only. He clears roughly $100K a year. Again, a substantial operation with high margin liquor sales.
And what you are also leaving out is the outer islands that don't have the traffic Oahu has - so those mom and pop places on Kauai, Big Island, and Maui also bring down the averages.
Sure - I'm sure Morton's - Duke's - Morimoto's - Hy's all do very well - but I consider those the outliers.
Let's go with Ziprecruiter - most people know that -
Average business owner (all businesses): $48,558/year
Yes I am including the small mom and pop shops as 8 of the 15+ operate in those tiny strip malls. I think you're confusing a business owners' NOI and individual salary. A lot of small business owners don't even pay themselves and report a salary or hourly wage. They will sometimes pay themselves just enough to meet the minimum FICA/SS contributions which doesn't amount to much income wise. It's also not that uncommon that businesses report losses while still earning real profits. Forced depreciation alone can wipe out all of ones reported income in a year even if they are not realized. Especially over the last 10 years when tax laws were changed. Many assets can be fully depreciated in 1-5 years. Which before would take 5-10+ years.
You tend to hang your hat on these aggregator/averaging websites that don't really provide any useful information to support your position/argument. For example the ziprecruiter site states that the highest salary owners are Flatbed Owner Operators @ $269,272 and Owner Operator Truck Drivers @ $255,685. And Waipahu earns the highest salary statewide. This is likely because there aren't a ton of registered and active sole proprietorships, LLCs, partnerships, etc that own truck driving operations. It is costly for a truck operator to maintain their licenses if they aren't active and producing income. So they become inactive if they aren't productive earners. Unlike countless other business owners that may have literally close to zero expenses to maintain an active tax filing. For every registered flat bed operator there are likely hundreds of, for example, web development companies in Hawaii. To Tulemutt's point, imagine how many registered companies exist that report zero income? There are likely 10-20++ existing and active businesses that report close to zero income for every legitimate full time business owner in this state. Clearly these countless companies are not being "weeded" out of the aggregator sites if the highest paid business owners are truck operators. And even if you think they are weeded out how is that even possible? Do they just eliminate any business owner that makes less than $10k a year? It would be impossible to provide any semblance of useful data because they can't possibly weed out the non-producers.
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