HONOLULU - A state Senate committee is pushing to increase the state minimum wage by $2 to $9.25 per hour.
The move comes a day after President Barack Obama called for a federal wage hike from $7.25 to $9 in his State of the Union address.
Hawaii's hourly minimum wage is set at $7.25.
The Senate Judiciary Committee voted Wednesday to increase the wage to $9.25 over the next two years.
The committee also voted to adjust the wage along with inflation starting in 2016.
The committee's action brought concern from Maui Chamber of Commerce President Pamela Tumpap.
"Our businesses are still trying to recover" from the recession, she said Wednesday. "They are already hit with already-higher costs on different fronts."
She added that health care, electricity and gas are just some of the other costs that could increase for local businesses.
Tumpap said raising the minimum wage could force employers to tinker with the wage scales of all employees so that those employees with more experience and seniority are fairly compensated for their work while other workers earn the new higher minimum wage.
Tumpap added that tying wages to inflation as proposed would bring many problems because wages would fluctuate automatically without businesses having a chance to argue their case with politicians or other government officials.
"It takes the voice of business out of the equation moving forward. It takes an unstable economy out of the equation," she said.
Tumpap added that the bill does not look at two sides of the matter and doesn't factor in how businesses would need to cope.
"We don't feel that this bill has been adequately weighed in terms of the impact on businesses, and it's moving forward," she said.
The committee originally considered the matter last week but met again Wednesday to revise wording of the bill.
Senate Judiciary Committee Vice Chairwoman Maile Shimabukuro said the increase is necessary to help Hawaii residents afford the state's high cost of living.
"There really is a disconnect between the cost of living in Hawaii and the wages you earn in Hawaii," Shimabukuro told The Associated Press.
She said she knows homeless people who work but still can't afford rent in Hawaii.
"There's something wrong with that picture," she said.
Several social service nonprofits support the bill and urged lawmakers to adopt it during a public hearing last week.
The groups were opposed by members of Hawaii's business community.
Daniel Nellis, of Dole Food Co., said the increase would hurt Hawaii's agricultural industry, which relies on affordable unskilled labor.
Jenai Wall, chairman of Foodland Supermarket Ltd., said the proposed increase would force the supermarket to cut jobs and reduce benefits.
Tim Lyons, vice president of the Hawaii Business League, said it's unfair to compare Hawaii's wages with other states because Hawaii businesses have to pay for health care and other benefits under state law.
"Given today's realities, there is no extra money for most companies to pay more wages," Lyons said.
Sen. Sam Slom, the only Republican in Hawaii's 25-member state Senate, was the only committee member to oppose the wage hike. Democrats have control over both of Hawaii's legislative chambers.
The minimum wage increase is part of Gov. Neil Abercrombie's agenda this year.
The Democratic governor told lawmakers in January that he wants the minimum wage to increase by $1.50 by next year.