A new study finds more than half of Hawaii’s households are living from paycheck to paycheck, one financial hardship away from poverty.
The report, “The High Cost of Low Wages” by Hawaii Appleseed, a nonprofit social and economic justice think-tank, found that Hawaii’s cost of living is 13.2% above the national average, and the average urban household spends more than 56% of its budget on housing and food.
It also found that wages have increased only 24% since 1980, not keeping pace with inflation, and the median wage of $21.66 per hour is a living wage only for a single full-time working adult without children.
“Hawaii’s low wages threaten to lead our society toward an untenable situation in which our economy can no longer be supported by a working class that has been squeezed out and denied the opportunity to thrive,” said Hawaii Appleseed senior policy analyst Devin Thomas.
The report found that a living wage for an adult with one child is $41.71 an hour, while a living wage for an adult with two children is $50.87 hourly.
It concludes that chronically low wages have prevented Hawaii’s working families from thriving, and said the effect of poverty on children has ramifications for future generations. With the main drivers of the economy being tourism and hospitality, low wages are entrenched for much of the working class.
“Countless individuals have spoken to Hawaii’s over-reliance on tourism for several decades now, but no viable industries have emerged to replace it,” Thomas said. “In the report, we discuss how our state’s investment in the technology sector has failed to produce lasting benefits.
“Even if we do identify a profitable, high-paying industry that can eventually replace tourism, it will take many years for it to become a large driver of our economy. Our report puts forward recommendations, such as the creation of a state-level child tax credit, that would tackle Hawaii’s high cost of living in the meantime.”
Another finding is that households with married couples are far less likely to be below the poverty line than those with single mothers as the head of household.
Only 3% of the two-parent households with one or two children are impoverished, the study found, while 18.6% of households with single mothers and one or two children are below the poverty line.
The median income in Hawaii, the study states, is $41,754 yearly, while the median home price is $820,100, putting home ownership out of reach for the majority.
Gov. Josh Green has made housing a priority, with a goal of 50,000 new homes constructed.
“Housing should be affordable for every Hawaii resident, but it is undeniable that low-income residents are feeling the largest financial strain,” Thomas said. “Although we applaud the governor’s desire to rapidly build affordable housing at scale, there is a finite amount of space to do so without provoking legitimate environmental and cultural concerns, not to mention the sheer cost and logistical complexity of building units for people at all ranges of affordability.”
“In addition, the state and counties should continue to make public investments in the construction of income-restricted affordable housing, so Hawaii’s low-income families can afford to continue to live and work here,” added Will White, Hawaii Appleseed’s deputy director.
Hawaii is losing population, with both educated young professionals and blue-collar workers leaving for better wages and more affordable housing elsewhere.
“This trend is accelerating, and it will only get worse unless substantial steps are taken to address it,” Thomas said. “We need to ensure that local wages can support a person’s basic needs, regardless of whether they’re a service worker or a white collar professional. If businesses do not increase their wages to match the rising cost of living, the state government has a responsibility to ensure that the minimum wage is a living wage. They can also index the minimum wage to inflation, guaranteeing that it will keep pace with the increasing cost of living each year.
”We cannot afford to wait for the private sector to fix our state’s massive economic problems. The state government must take immediate action to foster greater economic security for Hawaii’s working families, or we risk losing the heart and soul of our local communities.”
Email John Burnett at jburnett@hawaiitribune-herald.com.
