Put more money in working people’s pockets and reduce housing costs
This legislative session, Hawaiʻi Appleseed is pushing hard to implement a significant minimum wage increase, expand successful tax credits for low-income families, and lay the groundwork for housing policy that will mean no one in Hawaiʻi is left unsheltered because of poverty.
Hawaiʻi’s economy should work for its people. But the reality is that many of our people are working for an economy that is not working for them. Over the past 40 years, as our state has experienced significant growth in productivity as measured by the GDP, our low-income and moderate-income workers have seen their incomes fail to keep pace with increasing housing costs. As they contribute more and more to our economy, they are falling further and further behind.
The economy is a human invention that mirrors human priorities. We make the rules. Gold, paper money, Bitcoin and NFTs—none of these things have inherent value; we give them value. Yet we as a society aren’t recognizing the inherent value in people.
We haven’t been willing to create an economic structure that allows people who work 40 hours a week to afford the most basic necessities. Our society says Pokémon cards are worth thousands of dollars, and yet we aren’t paying people the $19 an hour they need to afford rent and food. We must remake the economy into a tool to serve people.
Hawaiʻi Appleseed’s 2022 legislative agenda is focused on valuing people and treating them with dignity:
We are pushing for a minimum wage that comes closer to covering the basic necessities for people working a full time job.
We are pushing for an Earned Income Tax Credit that helps to make up the difference when wages fall short of a basic needs budget.
And we are pursuing community-driven housing initiatives that will help bring down the cost of living in Hawaiʻi.
Raise the Minimum Wage to $18 by 2026
With the highest cost of living in the nation, $10.10 an hour—or just $21,000 a year—is not a living wage for a single adult in Hawai‘i, much less adults supporting children and others. As low-wage jobs become the new normal, working families are falling further and further behind even as the economy continues to grow.
According to data from the Hawai‘i Department of Business, Economic Development & Tourism (DBEDT), the self-sufficiency income standard for a single adult with no children and with employer-provided health insurance in 2020 was $37,646 per year, or $18.10 per hour for full-time work with no weekdays off the whole year. With inflation, that’s over $19 an hour in 2022. The self-sufficiency wage for that same adult in 2018 rose above $31 per hour with the addition of a child.
By 2026, an $18 an hour minimum wage will still be further away from a living wage than it would be if we enacted it today because of inflation. But it puts working families within striking distance of true self-sufficiency, and a quality of life that everyone deserves.
It’s imperative that we reach $18 by 2026, however. A proposal to get there by 2030 is simply far too slow for working families who have already seen the minimum wage eroded by the past four years of inflation. The annual income of minimum wage workers are effectively $2,000 less today than they were in 2018. We’ve been going in the opposite direction of where we need to go, and we need to make an immediate course correction.
Due to the large disparity between the current minimum wage and a living wage, many people are forced to work two or more jobs, and rely on taxpayer-funded government assistance, to maintain a basic standard of living for themselves and their families. While $18 is a good target for 2022 legislation, inflation and the cost of living will continue to rise. That’s why we are asking for legislation to include automatic inflation adjustments based on the consumer price index, to keep the minimum wage at a livable level in perpetuity.
We’re also asking for the elimination of the state tip credit, which allows some businesses to pay a sub-minimum wage to their employees if they make over a certain amount of tips. Not only does this policy cause employees to be exposed to far higher rates of sexual harassment by providing a set wage that provides for self-sufficiency and making employees dependent on tips. It also contributes to income instability, putting workers at greater risk of poverty and financial insecurity. A better, safer, more fair policy is to eliminate tipping entirely and mandate a living wage for all workers.
SB2018: Raises the minimum wage to $18 by 2026.
Make the State EITC Refundable + Permanent
The Earned Income Tax Credit (EITC) is a special tax credit for families that work. This credit helps working families keep more of what they earn and has been helping Hawaiʻi residents make ends meet for the past four years. However, the lowest-income families that need it the most still can’t access its full benefits. And all families that benefit from it today are at risk of losing it if the legislature takes no action to make the credit permanent.
It’s tough to make ends meet in Hawaiʻi. We want working families to have a bigger tax refund come next year–helping offset the General Excise Tax they pay every time they pay the rent or purchase food–because research shows these families, when given financial breathing room, are the drivers of the consumer economy.
This credit would also have the greatest impact for families with children, and there’s no better investment we can make than investing in the future of our keiki. Now is the time to invest in working families.
Low-income families work just as hard as everyone else, but because they work low-wage jobs, their incomes and income tax bills are too small to take advantage of the full size of the EITC. These families deserve to be able to claim the full size of the credit, just like everyone else. This concept is called “refundability.”
Under the state’s current EITC, workers with the lowest incomes get the least benefit from the EITC. In 2020, workers earning less than $15,000 claimed $83 on average in EITC, while workers with incomes of $55,000 claimed $484 on average. Under a refundable EITC, the lowest income workers would realize an average benefit of $386. When coupled with a much larger and refundable federal EITC, Hawaiʻi’s workers with low-incomes can leverage this powerful tax credit to meet basic needs like food, rent and transportation.
Refundability becomes even more critical when looking at potential benefits by race. Currently, Native Hawaiians, Pacific Islanders and Filipinos have the highest utilization rates of the state EITC. Due to impacts of systemic racism and colonialism, these groups often face multiple barriers to economic security and have the lowest average wages among major ethnic groups in Hawaiʻi. Making the EITC refundable would increase the average EITC payment for Native Hawaiians, Pacific Islander and Filipinos to $497, $536 and $459 respectively, accounting for the largest increases among all ethic groups.
Working families pay 15 percent of their incomes in state and local taxes; incomes that are already deeply strained by the high cost of living. By contrast, the wealthiest earners pay only 8.9 percent of their abundant incomes. When you are barely making ends meet, that 15 percent doesn’t leave a whole lot leftover. This is a great way to help working families keep more of what they’ve earned through their hard work and boost the economy at the same time.
The many benefits of a permanent and refundable EITC, and the means for adopting one, are detailed in a new report on the EITC published by Hawaiʻi Appleseed’s Hawaiʻi Budget & Policy Center.
HB1507/SB2485: Increases the tax rate on capital gains. Makes the state earned income tax credit refundable and permanent.
HB2406: Makes the state earned income tax credit refundable and permanent.
Reduce the Cost of Housing in Hawaiʻi
To reduce the cost of housing in Hawaiʻi, Appleseed is pushing legislation forward along four priority policy avenues. These priorities were selected by the members of the Hawaiʻi Housing Advocacy Coalition, which Appleseed convenes.
Investing $600M in public funds for Native Hawaiian beneficiaries
To provide affordable housing for all residents, we will need significantly more public investment in housing. A great place to start is with Hawaiian Homeland beneficiaries, many of whom have been waiting decades for a homestead. This investment will allow the infrastructure and financial support needed to assist beneficiaries at all income levels to access a homestead.
In future years, the state should consider similar public funding to support the hundreds of thousands of local residents struggling with housing costs who are not at least 50 percent Native Hawaiian.
Expedited permitting for transitional housing
One of the critical elements of a comprehensive housing plan is transitional housing—simple shelters that help stabilize people. The success of places like Puʻuhonua o Waiʻanae demonstrate the importance of this part of the continuum of policy needed to address housing and homelessness, yet current law makes it difficult to replicate that success.
Appleseed supports a policy of reducing the barriers needed to create these specific kinds of transitional housing communities by creating exemptions to bypass some of the regulations that are necessary for large developments, but not for simple shelters that can help get folks off the streets quickly.
A number of bills examine the issue of creating more transitional housing in related, but slightly different models, including the kauhale program and ʻOhana Zones. The kauhale program would establish a community council to inform the development of transitional housing with seats reserved for formerly houseless individuals.
SB3018: Establishes the kauhale program.
HB2512: An ʻOhana Zones bill with kauhale program language.
HB1796: ʻOhana Zones
SB3168: ʻOhana Zones
Prohibiting source of income discrimination
Rental housing assistance—in the form of vouchers or other subsidies—can help many of our low- and very low-income households to obtain and keep a rental unit while staying within their community. However, once households receive vouchers they often have a difficult time finding landlords and property managers who will allow them to apply for rental units.
Many advertisements for rentals include language such as “No vouchers” or “No Section 8.” These types of practices are called rental source of income (SOI) discrimination, or discrimination based on where a person’s rental money comes from (i.e., in part or in full from a voucher or subsidy).
Exclusionary practices based on a household’s voucher status keeps people homeless or living in situations of housing instability for longer, and contributes to households losing vouchers they may have been waiting for years to receive. Prohibiting SOI discrimination in Hawaiʻi would help to level the playing field and would give households with rental assistance a better chance at getting into safe and stable housing.
HB1752: Prohibits SOI discrimination.
SB206: Prohibits SOI discrimination.
SB2399: Prohibits SOI discrimination.
Expanded TANF & TAONF benefits
Appleseed supports expansion of benefits for Temporary Assistance for Need Families (TANF) and Temporary Assistance for Other Need Families (TAONF, which covers Compact of Free Association migrant families, for example). As a means of keeping more families in their homes by alleviating some of the high costs of housing and other basic needs that keep many families struggling on the edge of eviction, an additional $500 per month to put toward shelter would go a long way toward stabilizing this at-risk population.
