Hawaii Raises Its Minimum Wage to $10.10 an Hour, Strikes a Big Blow Against Tipping

A blog about business and economics.
April 30 2014 1:57 PM

Hawaii Raises Its Minimum Wage to $10.10 an Hour, Strikes a Big Blow Against Tipping

180589416ML00052_The_2014_M
A McDonald's breakfast, Hawaii style.

Photo by Phil Mislinski / Getty Images

Lawmakers in Hawaii, that faraway archipelago of sunny liberalism, have voted to raise the state’s minimum wage to $10.10 an hour, up from the federal floor of $7.25. It will become the fourth state to pass a minimum at or above the $10 mark, joining a club that includes California, Maryland, and Connecticut, along with Washington, D.C. (which is almost like a state, considering it has a bigger population than Wyoming). 

Jordan Weissmann Jordan Weissmann

Jordan Weissmann is Slate's senior business and economics correspondent.

President Obama has pushed to hike the federal minimum to $10.10 as well, but the idea isn't going anywhere so long as Republicans control part of Congress. That makes these state-level wins especially important for Democrats looking to get momentum on worker pay.

(Should you feel compelled at this point to jump into the comments section and start opining on minimum wage laws, I do ask that you start by reading this FAQ I put together a while back. Or, if you prefer, here’s Evan Soltas’ from Vox.)

Advertisement

Now, for my money, the coolest part of Hawaii’s new law, which the governor is expected to sign today, is that it also applies to tipped workers, who unfortunately tend to be neglected during discussions about the minimum wage. Here’s how Bryce Covert at ThinkProgress explains it:

Workers who make less than $17.10 an hour including their tips will have to be paid the $10.10 wage plus tips, and the employers of those who make more than that level can deduct a 75 cent tip credit from their wage. By contrast, Maryland’s tipped workers’ minimum wage is still frozen at $3.63 an hour and in Connecticut it will remain at 63.2 percent of the higher wage, rising to $6.38 per hour once $10.10 takes effect. At the federal level, the tipped minimum wage remains at $2.13 an hour, where it has been for two decades.

A $10.10 minimum for waiters, cab drivers, and their tipped compatriots will be a huge deal. For a little perspective, consider this: There are about 1.5 million workers who earn the federal minimum wage. There are almost 1.8 million who earn less, in most cases because they are tipped. Especially in a service-heavy economy like Hawaii’s, this will likely put money in a lot of workers’ pockets.

Moreover, by raising the minimum so high, Hawaii may well be striking a large blow against the entire institution of tipping, which, as Slate has carefully explained, is an antiquated abomination (tl;dr version: Tipping doesn’t actually encourage better service, in part because service quality doesn’t really influence how customers tip, and forces low-wage workers to rely on the kindness of strangers for their pay). Chances are, at least some restaurants will say goodbye to tipping and begin adding a standard service charge to checks in order to cover the extra money they have to pay their waiters and waitresses out of pocket. Not all of them will do so. But it could be a start.

Jordan Weissmann is Slate's senior business and economics correspondent.

TODAY IN SLATE

Politics

Meet the New Bosses

How the Republicans would run the Senate.

Even by Russian Standards, Moscow’s Anti-War March Was Surprisingly Grim

I Wrote a Novel Envisioning a Nigerian Space Program. Then I Learned Nigeria Actually Has One.

The Best Thing About the People’s Climate March in NYC

Friends Was the Last Purely Pleasurable Sitcom

The Eye

This Whimsical Driverless Car Imagines Transportation in 2059

Medical Examiner

Did America Get Fat by Drinking Diet Soda?  

A high-profile study points the finger at artificial sweeteners.

The Government Is Giving Millions of Dollars in Electric-Car Subsidies to the Wrong Drivers

A Futurama Writer on How the Vietnam War Shaped the Series

Trending News Channel
Sept. 20 2014 11:13 AM Watch Flashes of Lightning Created in a Lab  
  News & Politics
The World
Sept. 22 2014 12:30 PM Turkey Just Got Forty-Six Hostages Back From ISIS. How Did That Happen?
  Business
Moneybox
Sept. 22 2014 12:44 PM The U.S. Is So, So Far Behind Europe on Clean Energy
  Life
The Shortcut
Sept. 22 2014 12:31 PM Down With Loose Laces A simple trick to tighten your running shoes for good.
  Double X
The XX Factor
Sept. 22 2014 12:29 PM Escaping the Extreme Christian Fundamentalism of "Quiverfull"
  Slate Plus
Science
Sept. 22 2014 8:08 AM Slate Voice: “Why Is So Much Honey Clover Honey?” Mike Vuolo shares the story of your honey.
  Arts
Brow Beat
Sept. 22 2014 12:22 PM The Age of the Streaming TV Auteur
  Technology
Future Tense
Sept. 22 2014 12:14 PM Family Court Rules That You Can Serve Someone With Legal Papers Over Facebook
  Health & Science
Science
Sept. 22 2014 12:15 PM The Changing Face of Climate Change Will the leaders of the People’s Climate March now lead the movement?
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.