The retail industry is the largest single employer in the state, employing 20 percent of the labor force.

The Retail Merchants of Hawaii strongly opposes SB 2145, which provides for an annual adjustment to the state minimum wage based on federal cost of living allowance increases.

At a time when retailers and other businesses are beginning to show stability and optimism after the economic devastation caused by September 11th, SARS, and other international catastrophes, an increase in employment costs will certainly obstruct any expansion and job creation.

An increase in the minimum wage would cause a compression of wages between newly hired, inexperienced workers and veteran, experienced employees. An attempt to make appropriate adjustments along every tier of the employment scale would cause a tremendous and prohibitive increase in overall employment costs. Furthermore, an increase in payroll costs would also lead to increases in benefit costs that are based on wages, including vacation and holiday pay, unemployment insurance, social security and Medicare, and workers

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