There is something about the ALICE Project that cuts through the fog obscuring Hawaii economic realities. Recent reports extolling the flourishing visitor industry, the still-falling unemployment rates and, more recently, the increase in family area median income paint a rosy picture.
Yes, Hawaii has a jobless rate hitting a historically low floor: 2 percent, lowest on a record going back to 1976, according to the state Department of Labor and Industrial Relations.
Yes, Honolulu’s families recorded a nearly 11 percent jump in area median income (AMI).
Yes, hotel rooms are full, and the tourists keep coming — with one more new airline planning to serve routes between key mainland cities and the islands.
But dig beneath the surface, and some harder truths emerge. The ALICE Project, an annual report issued by United Way nationally, shows Hawaii as tied with California and New Mexico among the 18 participating states for having almost half of its families in a financial struggle.
Reversing this will take a concerted effort by public and private partners. Among other goals, it means directing more attention toward this borderline group, helping people gain the skills needed to earn a living wage.
United Way uses the acronym ALICE to reference people who are Asset Limited, Income Constrained, Employed. These are people who can’t afford a basic monthly survival budget including housing, food, child care, health care, transportation and a cell phone. The project started in 2007, at the very beginnings of the Great Recession, and measures change over time, since 2010 when the downturn ended, according to its website (www.unitedwayalice.org).
The current report, based on 2015 data, shows Hawaii with 11 percent of households earning below the federal poverty line, with an additional 37 percent falling within the ALICE zone, many with service-industry jobs.
Families with children bear additional expenses, and the group that struggles the most are those headed by a single female parent: In those, 37 percent live below the poverty line and 49 percent more are ALICE families.
How can this make any sense, given the more optimistic metrics that have come out?
For starters, the family AMI jump was coming off a somewhat lower figure for the preceding year, said Carl Bonham of the University of Hawaii Economic Research Organization. And, because it’s the total income of all family members, it likely doesn’t mean a wage increase from a particular employer. It could signify a new job for one household member who was formerly unemployed, he said, or one who is taking on an extra part-time job.
That, in fact, is likely part of the difficulty for the ALICE group, said Cindy Adams, CEO for Aloha United Way, the Hawaii chapter. Child care is one of the key monthly costs cited: A family of two adults and two small children pays, on average, $1,207 for child care, approaching the $1,362 for housing.
On the Big Island and Kauai, child care costs were the largest monthly expense. Any added income from another part-time job may be needed to cover that.
And after food and transportation comes health care in the ranking of monthly costs. The prospects for the future of that element are dim as well.
Recent reports from Hawaii health insurers indicate a drop-off in membership, due to the repeal of the Affordable Care Act’s individual mandate. And, as healthy people drop out of the insurance pool, the rates are projected to rise accordingly to cover the needs of the sicker population that remains.
Fold in the additional factor of inflation over the years, and there’s good reason why many people are left wondering, “Why don’t I feel richer?” Even with the much-touted economic recovery for Hawaii, Bonham said, families are left with basically a flat income level, no better than it was 10 or, in some cases, even 30 years ago.
Already there has been some movement to address the need of families who, if not unemployed, are underemployed. Much of the response has been around education, with initiatives to improve readiness for better-paying jobs.
The 2017 Legislature approved $1.8 million for each year of the 2018-19 biennium for Hawaii Promise. This program covers any unmet financial needs for tuition, fees, books, supplies and transportation for UH community college students. There is also the Early College program at public high schools allowing students there to earn college credits alongside their diploma requirements.
Norm Baker, AUW chief operating officer, said the charity is reformulating its grants program to help fill in the ALICE gap, supporting projects focused on school success and job preparation, including early childhood programs.
Hawaii’s economic concerns must be adopted similarly by nonprofits, businesses and government. It will indeed take a collaborative push from all fronts to get this state back on the right track, enabling more of its citizens to earn a living wage.