Executive Summary

Growing up in a financially secure household is often one of the highest predictors of future economic success. Despite working and being active players in 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. 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.

Living in a low-wage household can have permanent adverse impacts on a child’s chances of success as an adult, and this impact carries over from one generation to the next. The disadvantages of growing up in poverty mean that children in low-income households are less likely to move up the income ladder when they begin working, compared to their peers from financially secure households. 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 can impose a high cost on our keiki through loss of future economic productivity, poorer health outcomes, and less educational attainment.

However, policymakers have at their disposal highly targeted 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. Specifically, lawmakers can invest 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 can 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.

In this report, we demonstrate how chronically low wages have prevented Hawaiʻi’s working families from thriving, and identify policies that can help to resolve the root problems that cause poverty.