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Report highlights domino effect of low wages, high costs of living in Hawaiʻi

A cart full of groceries is seen at the check-out counter at a Kroger store in Gahanna, Ohio. (AP Photo/Paul Vernon)
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FILE - A cart full of groceries is seen at the check-out counter at a Kroger store in Gahanna, Ohio. (AP Photo/Paul Vernon)

The ramifications of the COVID-19 pandemic on Hawaiʻi households continue to be felt throughout the state, with many sliding below the poverty line.

The number of working households that are unable to meet their needs despite employment has grown by more than 66% since 2018, according to a new report from the Aloha United Way and Bank of Hawaiʻi Foundation.

Households that fall under this category are called ALICE. The acronym stands for “Asset Limited, Income-Constrained, Employed.” It represents those who have an income above the federal poverty line, but cannot afford basic necessities. For this research, that’s defined as housing, child care, food, transportation, health care and a basic phone plan.

"These are real people, these are not just statistics on a piece of paper," President and CEO of Aloha United Way John Fink said. He noted that more than 200,000 are in the poverty level. "It's an astounding figure that we have to deal with going forward."

The ALICE initiative started in New Jersey, and Hawaiʻi joins a cohort of states that seek to understand, and eliminate, this demographic through policy changes and outreach.

Because an ALICE household is above the poverty line, they usually cannot qualify for federal or state assistance programs. For some, it becomes a cycle of overdrafting bank accounts and borrowing money from friends and family to pay for daily bills and expenses.

The state’s average “household survival budget” for a single adult is about $35,000, that’s a full-time job at $18 an hour, well above the state’s $12 minimum wage. For a family of four, a survival budget is more than $100,000.

"I think the caution that I get concerned about is that if we're not effective in communicating the roadmap to reducing the cost of living in Hawaiʻi, which I think we can do, the pressure falls to wages," Hawaiʻi Community Foundation CEO and President Micah Kane said. "We will never wage increase ourselves out of this catastrophic costs structure right now, and by shifting the focus to wages, is immediately dividing our community."

Kane said there needs to be a greater focus on bringing the cost of living and housing down, as well as eliminating the barriers to child care, rather than raising wages.

"We're trying to drive wages over and above the cost structure, that's just not possible," Kane said. "It is completely not possible, we got to accept that, and we got to focus on the cost of living."

The study was funded by the Bank of Hawaii Foundation, in partnership with the Aloha United Way and the Hawaiʻi Community Foundation, after a four-year gap between the first report in 2018. Between the two latter organizations, about $4.5 million has been invested in the ALICE Fund for the next three years.

From July to Sept. 13 this year, Anthology Research conducted a phone and online survey of full-time Hawaiʻi residents. The final report is comprised of 2,391 surveys.

What the study finds is that more Hawaiʻi households have fallen below the ALICE threshold since 2018, and that about 3 in 4 households are carrying debt.

In the state, only 56% of households are above this ALICE threshold with enough income to cover basic necessities. That's also down from 2018.

Typically, households that are below the ALICE threshold are ones that work part-time, are paid hourly, are unable to work or are disabled, or may be working multiple jobs. More than half of these households have children.

Childcare can be a barrier to working full-time. During the pandemic, many daycares and preschools became size-restricted.

"These were experiences of course during the pandemic, but was more significant is that despite our community coming out of the pandemic many of these challenges are persisting, particularly those with that are below the ALICE threshold," Kimo Carvalho of Aloha United Way said. "These lasting impacts are similar to what we saw during the great recession."

The study also highlights that Native Hawaiians and Pacific Islanders are among the largest groups who report they're just getting by or have difficulty.

It's through policy and outreach that a difference can be made, but that's where lies some of the issues.

Carvalho said that partner organizations report that outreach is one of the biggest struggles.

"It's hard to self-assess and become self-aware of some of the behaviors that puts you at high risk," he said.

Sabrina Bodon was Hawaiʻi Public Radio's government reporter.
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