Hawaiʻi, 1980–now: a tale of rising inequality

HONOLULU, Hawaiʻi — Since 1980, rising income inequality paired with rising cost-of-living have been the dominant features of Hawaiʻi’s socioeconomic landscape. It has become increasingly difficult for families to make it in the archipelago, particularly as wages have stagnated and housing costs have exploded. This is the conclusion presented by the Hawaiʻi Budget & Policy Center (HBPC) in a new data visualization entitled, “Hawaiʻi Wages and Household Costs: A Chartbook for Building a Better Economy.”

“Hawaiʻi’s post-COVID-19 economy must be one in which everyone has the opportunity to thrive,” said HBPC Director Beth Giesting. “The design of this new economy must be informed by an understanding that the old economic order had been failing many Hawaiʻi residents for decades. It featured ever-widening gaps between wages and the cost of living and persistent inequity in the ability to build household financial security.”

Essential household costs—housing, childcare, transportation, health care, and technology—have been growing faster than general inflation, with the increase in housing costs outpacing all others.

Ominously, the number of low-income workers who barely make ends meet from one month to the next (the “ALICE population”) continued to be substantial, even as the economy flourished and unemployment was low. Too many residents responded to Hawaiʻi’s lack of job opportunities and high costs by relocating to states that offered better economic prospects.

“Establishing a more equitable economy that increases opportunities and provides incomes that outpace rising costs is challenging but necessary in order to make Hawaiʻi the kind of place we all want it to be,” said Giesting. “Smart public policy is the solution for building opportunities to secure a better future for working families and an economy that leads to a better life for all Hawaiʻi residents.”

Hawaiʻi policy-makers should prioritize their efforts to reduce inequity and transform our socioeconomic paradigm in the following areas:

Housing

Local residents need homes that are safe and affordable. The construction of workforce housing can be an immediate economic stimulus, while the availability of housing is a linchpin for future economic growth and diversity. In addition, studies point to enhanced economic mobility for low-income families who live in mixed-income neighborhoods.

Jobs

Working people in Hawaiʻi deserve to have jobs that provide economic security without having to sacrifice time for family, community, and leisure. Alternative income supports and public works projects need to be considered as jobs in the old economy give way to technology and changing demand.

Education

The best investment Hawaiʻi can make in its future is to ensure that every child has access to high-quality public school, from pre-K to an advanced degree. Studies show the lifelong economic benefits of good early learning. Access to many of the kinds of jobs that provide economic security and personal satisfaction depend on opportunities to get affordable skills training or graduate from an institution of higher education. Expanding education jobs also enhances economic diversity and sustainability.

Infrastructure and Environment

Improving and expanding Hawaiʻi’s infrastructure for transportation, water, waste, and broadband information technology builds the foundation for a productive economy and environmental sustainability. Investments here, as with housing development, support immediate and long-term economic growth.

Food

Healthy residents and the economy that supports them need a reliable, affordable supply of healthy food. Supporting the expansion of local agriculture is an economic investment that increases Hawaiʻi’s food security.

Health

Good health depends on positive social and economic conditions. Ensuring that people have decent housing, paying jobs, quality education, and good food will reduce health care costs and absenteeism. Access to timely, affordable health care is a continuing goal that has the added benefit of supporting a growing, sustainable economic sector with jobs on every island.

Strong Communities, Civic Engagement, and Trust-Worthy Government

Making Hawaiʻi the kind of place where people can live good lives isn’t just about incomes and material needs. Our policies must encourage widespread involvement in community and civic engagement activities, and they need to uphold accountability, transparency, and engagement on the part of our leaders.

Fairness, Equity, Opportunity

A strong commitment to ensuring that the economy we’re rebuilding shares gains and opportunities equitably and fairly must inform all policies and investments. The priorities outlined here contribute to the social and economic inclusion and mobility that Hawaiʻi needs for a better future.

HBPC’s mission is to ensure that our state and local economic policies increase opportunity for all residents. We do this by analyzing and understanding the implications of tax and budget decisions and making sure that the public and policy-makers are informed through strategic communications, coalitions, and key partners. Our work is guided by the belief that government at all levels should play an active role in helping people reach their full potential.