Relating To The Department Of Business, Economic Development, And Tourism.
Summary
SB981 requires the Research and Economic Analysis Division within the Department of Business, Economic Development, and Tourism (DBEDT) to study the effects of Hawaii’s minimum wage increases enacted under Act 114, Session Laws of Hawaii 2022. The study must examine how many businesses and other employers were affected, how many closed or shut down because of increased labor costs, and what other factors may have contributed to those closures. It must also compare Hawaii’s experience with other states that have adopted higher minimum wages and assess the business impacts in those states.
The bill directs DBEDT to submit a report with findings, recommendations, and any proposed legislation to the Legislature no later than 20 days before the 2026 regular session. It also includes an unspecified appropriation from general revenues for fiscal year 2025-2026 to fund the study, with DBEDT responsible for spending those funds for the bill’s purposes. Although the bill text states an effective date of July 1, 2050, the measure is clearly structured as a study-and-report bill tied to the 2026 legislative cycle.
Impact
If enacted, SB981 would not directly change Hawaii’s minimum wage law, but it would create a new statutory mandate for DBEDT to research and report on the economic effects of prior minimum wage increases. It would require state spending through an appropriation and would likely inform future legislative action by producing data on business closures, labor-cost impacts, and comparisons with other states. The bill would affect DBEDT’s Research and Economic Analysis Division and indirectly affect employers, workers, and policymakers interested in wage policy.
Sentiment
The available voting history suggests the bill was received favorably in committee, passing the Senate Economic Development and Technology Committee 3-0 with amendments on January 30, 2025. No committee transcript is available, so there is no recorded floor discussion to indicate broader debate. Overall, the measure appears to have been treated as a fact-finding proposal rather than a controversial policy change, with support for gathering more data before any further action on minimum wage policy.
Contention
The main point of potential contention is the bill’s focus on whether minimum wage increases have harmed businesses, including closures attributed to higher labor costs. Supporters are likely to view the study as a necessary evidence-based review of Act 114’s effects, while critics may see it as framing wage increases negatively or as an attempt to build a case against future wage growth. Another possible issue is the unspecified appropriation amount, which leaves the cost of the study open-ended until finalized.