Hawaiʻi’s low wages relative to its cost of living put a serious strain on society, local economy

HONOLULU, Hawaiʻi — Despite working hard and actively supporting our local economy, more than half of Hawaiʻi’s households are living paycheck to paycheck, and are one financial hardship away from slipping into poverty. This is bad news for the resiliency of our economy and the wellbeing of our society. 

In a new report, “The High Cost of Low Wages,” Hawaiʻi Appleseed researchers demonstrate how chronically low wages have prevented Hawaiʻi’s working families from thriving, and outline the significant cost that poverty exacts from these families, from future generations, and from all of us. The report also identifies policies that can help to resolve the root problems that cause poverty. 

“Hawaiʻi’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 Hawaiʻi Appleseed senior policy analyst Devin Thomas.

The causes of poverty are many, but here in Hawaiʻi much of it is driven by our high cost of basic needs, including housing, healthcare and food, as well as the growing share of low-wage, low-opportunity jobs. The impacts of poverty can be especially detrimental to children. Living in a low-wage household has a permanent impact on a child’s success as an adult, and this impact carries over from one generation to the next.

The failure of low-wage jobs to provide economic stability can perpetuate a cycle of intergenerational poverty that keeps families trapped in poverty. This lack of economic mobility imposes a high cost on our keiki through loss of future economic productivity, poorer health outcomes, and less educational attainment. 

“Fortunately, policymakers have at their disposal highly targeted policy interventions that can help to short-circuit the cycle of poverty and help Hawaiʻi’s children from low-income families ladder-up on their journey to economic success,” said Appleseed deputy director Will White.

Specifically, the report advocates for legislative investment in proven economic supports, such as creating a state-level Child Tax Credit that will help low-income families cope with Hawaiʻi’s high cost of raising a family. 

“In addition, the state and counties should continue to make public investments in the construction of income-restricted affordable housing, so Hawaiʻi’s low-income families can afford to continue to live and work here,” added White.