Rising prices, increasing poverty, slowing job growth: Hawaiʻi’s economy faces grim times

Still, even for those with jobs, rising prices are putting a pinch on households in a place with notoriously high costs of living. Food banks are struggling with increased demand, and even with federal stimulus money, the pandemic weakened tens of thousands of households financially.

The Hawaiʻi Appleseed Center for Law & Economic Justice’s Hawaiʻi Budget & Policy Center last week pointed to new census data showing poverty in the state increased by 1.9 percent for individuals and 1.6 percent for families between 2019 and 2021. That means 28,000 more individuals and 6,400 more families were living in poverty in 2021 than 2019. Median incomes decreased by 3.6 percent, representing a loss of $3,200 in annual income.

“I would say for low-income and working families, it’s always been a critical time,” said Will White, the center’s director. Now, they have rising prices on top of everything else.

“People are getting a double-whammy of sorts,” he said.

The impulse among political leaders is to cut taxes to ease costs on working people. Specifically, both major gubernatorial candidates, Lt. Gov. Josh Green and former Lt. Gov. Duke Aiona, have vowed to eliminate the state’s general excise tax on food. That would lower costs at the register by 4.5 percent on Oʻahu and 4 percent on neighbor islands.

But White notes such tax cuts, while popular, have costs.

“You’ve got to have a way to put that revenue back into the budget,” he said. Otherwise, he said, policymakers might have to cut other programs serving people struggling to get by. He suggested better options could be increasing tax credits to taxpayers with children, low-income workers and persons needing child care.

“Finding more ways to put money into peoples’ pockets at the end of the day, that’s what is really going to make a difference,” he said.