We feel the high cost of living here in Hawaiʻi every day, whether we’re deciding whether or not we can afford the price for a gallon of milk, or we’re trying to wrap our brains around how the median cost of a single-family home on Oʻahu has skyrocketed to $810,000. We talk about how our wages, when adjusted to consider the high cost of living here, are the lowest in the nation. So, in examining the newly released census data on poverty in the United States, it makes sense to factor in the cost of living before deciding what the numbers actually mean. Fortunately, the U.S. Census Bureau does that for us—if you know where to look.
The Census Bureau released its annual Official Poverty Rate (OPR) data, as well as its Supplemental Poverty Measure (SPM) data, on Wednesday, September 12. For both measures, people are considered to be “in poverty” if the resources they share with others in the household are considered insufficient to meet basic needs.
Looking at the average for 2015–17, Hawaiʻi appears to have the 10th lowest OPR among the states, at 10.2 percent. This represents some 142,000 residents who cannot make ends meet. But this does not paint an accurate picture of the extreme struggles people experience every day in the 50th state.
For starters, the OPR is based solely on available cash resources. This indicator was created in the early 1960s, when President Lyndon B. Johnson declared his “war on poverty.” The SPM, by contrast, extends the measure of poverty by factoring in several other important variables, including government benefits, taxes and necessary expenses.
When these factors are added to the equation, Hawaiʻi actually has the 10th highest poverty rate among the states, at 15 percent (the national SPM average is 14.1 percent) for 2015–17. This factoring includes an additional 68,000 residents, for a total of 210,000, who cannot meet their basic needs. Compared to the OPR, that’s an increase of 47 percent, which is the 3rd largest jump up to the SPM in the nation.
How do we decide what “basic needs” means? The OPR uses a strict three times multiplier of the cost of a minimum food diet in 1963, without adjusting for differences in the cost of living, or for the fact that the cost of food represents a much smaller portion of family budgets now than it was 55 years ago, when there generally was an adult at home caring for children and preparing food from scratch. In contrast, only one-eighth of the average household budget was spent on food in 2017, according to the Bureau of Labor Statistics.
Even for most places on the continent, this is an inadequate measure, but when put into practice here in Hawaiʻi, it’s painfully insufficient. Remember that gallon of milk? The average price in Hawaiʻi is $6.99, double the national average of $3.50. Because the SPM factors in information about what people spend, today, on food, clothes, shelter and utilities, it creates a much more accurate data set and is far more relevant to the economic narrative Hawaiʻi’s residents experience on a daily basis.
Additionally, while both measures adjust the poverty threshold to reflect the needs of families of different sizes and types, only the SPM takes into account geographic and cost of living differences. This means that the 2017 official poverty threshold for a family with two adults and two children was $24,858 while the SPM threshold was $36,239 for the same family, renting their home in urban Honolulu.
The two measures also make different assumptions about how people share resources. For example, the OPR assumes that all individuals residing together that are related by birth, marriage or adoption share income. The SPM begins with this baseline, but adds in any co-resident, unrelated children, foster children and unmarried partners and their relatives. In a place like Hawaiʻi, where ʻohana and extended-family residential setups are frequent and necessary, this makes a huge difference.
The SPM factors in benefits like housing subsidies, SNAP, low-income home energy assistance, the national school lunch program and WIC. It also factors in expenses, such as child care expenses, work-related expenses including transportation costs, different taxes levied on residents of different states, child support paid and medical expenses. With all this factored in, Hawaiʻi’s poverty rate increases by 4.9 percentage points.
So why don’t we use the more accurate SPM to measure poverty? A big part of it comes down to political narratives. Using the OPR, millions of people are kept above the official poverty line, while the SPM drops millions of people below that arbitrary marker. No president wants to be the one to make the switch and preside over a millions-strong increase in the poverty rate. But regardless of where we draw the line and what factors we use to determine who is above and who is below, the people who are affected by a lack of housing, by poor nutrition, by the stress of finding and paying for childcare, by falling behind on utility payments, by crushing levels of debt, by insufficient access to healthcare—they feel the effects just as viscerally regardless of which side of the poverty line they end up falling on.
Just like how our historically low employment rate hides the fact that thousands of adults in Hawaiʻi have no time to spend with their families because they are working two or three jobs, relying on the Official Poverty Rate hides the true story of the hundreds of thousands of people struggling to survive in this beautiful, painfully difficult place to live.
There is some good news though: the poverty rate has decreased from 2013–2015’s 16.8 percent, meaning 19,000 fewer people are unable to meet their needs than during that prior period.
So when you hear that Hawai‘i has one of the lowest poverty rates in the nation, remember that’s because the official rate doesn’t take into account our highest-in-the-nation cost of living. Also remember that the Census Bureau has a more accurate poverty measure, one that shows that Hawai‘i actually has one of the nation’s highest poverty rates, which more accurately reflects what we see here every day.