Cathy Bussewitz

AP Business Writer

HONOLULU (AP) — Hawaii has raised its minimum wage to $10.10 per hour, putting the state among the first to meet President Obama's goal of increasing the minimum wage nationwide.

Gov. Neil Abercrombie signed the minimum wage bill into law in a ceremony Friday, marking the first time Hawaii's minimum wage will be raised from $7.25 since 2007.

The increase will be phased in gradually over four years. Abercrombie said he wished the hike was coming quicker, but "we're swimming in the water that we're in."

"I always thought it's not a minimum wage, it's a survival wage," Abercrombie said. "And in today's world, that minimum wage is not a survival wage, certainly in Hawaii."

Hawaii is the third state this year to increase its minimum wage to $10.10 per hour, following Connecticut and Maryland, said Jack Temple, policy analyst for the National Employment Law Project.

Supporters say higher wages will help working families. Living costs are high in Hawaii because nearly everything from apples to air fresheners is shipped to the island chain.

"Money put into the hands of Hawaii's working people will get spent, it will increase the economic activity in the state," said Rep. Mark Nakashima, a Big Island Democrat.

Some had argued the change will hurt small businesses and that managers may lay off workers or hire fewer people. Abercrombie said he has heard the same argument since the 1960s.

"The take-home wage compared to the cost of living has steadily gone down," Abercrombie said. "This country is about moving up."

Sen. Clayton Hee, a Democrat who represents Kaneohe, said he wished the resulting minimum wage hike was better, but lawmakers had to reach a compromise.

"I grew up thinking meat came from a can, not a cow...because that's all we could afford," Hee said. "That's what local people do. We make ends meet."

Employers with tipped employees can get a credit of 50 cents per hour starting in 2015 and 75 cents per hour in 2016 for those workers who earn $7 more per hour than the minimum wage.

"Hawaii's move to do that really sets it apart," Temple said. "For the vast majority of tipped workers, employers will have to pay the minimum wage."

There are seven states that have no tip credit, meaning that tipped workers can keep all of their wages and tips without having a tip credit taken out. But their laws have been on the books for decades, Temple said. Hawaii is the first state in recent history to enact a change to the tip credit that preserves the full minimum wage for the majority of workers, he said.