A recent headline in the Star-Advertiser —“Hawaii homelessness rises by 4%”— is all too familiar. Despite all the attention the problem has attracted, the homeless population continues to grow, though thankfully, more slowly than in years past. Growing right along with the homelessness rate is the concern among visitors and residents alike who are seeing makeshift shelters popping up around the islands, often in stark contrast to the upscale residential areas nearby.
While there is universal concern about the problem, there is less agreement on what to do about it. Much of the discussion revolves around the cost of housing, but there is another force at work that has largely been missing from the conversation — how low wages and the skewed burden of taxation are pushing people to the curbside.
Given that Hawaii has the highest cost of living in the nation, in real terms we pay our workers the lowest wages compared to any other state. In 2018, our phased-in minimum wage increases that were set in motion in 2014 will top out at $10.10 — by which time it will be worth about $8.83 in today’s dollars. There is no mechanism for automatic adjustments to keep up with inflation thereafter. That means working 40 hours a week, 52 weeks a year without a single day off, minimum wage workers will still be struggling in poverty.
How does this connect to the growing numbers who have to live on the street?
With the cost of housing rising much faster than the minimum wage, if a worker could devote 100 percent of her full-time minimum-wage earnings to housing, and miraculously avoid paying for food, utilities, transportation and other needs, she would still not be able to afford to rent an apartment. A worker in Hawaii needs to earn more than $34 an hour to afford rent on a two-bedroom apartment.
We all know people — employees, friends, neighbors — who are juggling two or three jobs to cover the rent, and are paying the additional price in stress on themselves and their families. We can commend their hard work and hope for the best. But we can also improve the situation through changes in public policy.
We have examples of how other places have responded: New York and California plan to increase their minimum wage to $15. We can get there by 2023 with a $1 a year increase. Tying it to inflation thereafter will help close the widening gap between wages and the cost of housing. Policy makers can take comfort that this won’t drain the state’s coffers. Businesses benefit from workers putting those extra earned dollars back into the economy to purchase basic necessities.
Helping our neighbors begins with seeing them. It’s an oft-repeated myth that minimum wage jobs are mostly held by teenagers. In reality, only one-tenth of minimum wage workers are teens. Nearly 70 percent of the almost 200,000 workers in Hawaii impacted by the minimum wage are over 25 years old; 25 percent are parents; nearly 60 percent are women.
In addition to low wages, Hawaii has the nation’s second-highest effective tax rate on those in poverty. Out of all our state’s taxpayers, our poorest residents pay the largest share of their income in taxes, with 13.4 percent of their income going toward GET, income and property taxes. The top 1 percent, earning more than $375,000, pay only 7 percent of their income in taxes.
How pono is it that those who can afford it the least, pay the most? We need to answer that question honestly, and rectify the inequity. Doing so will keep more families off the streets, and hopefully, bring a few back inside.
Gavin Thornton is co-executive director of the Hawaii Appleseed Center for Law and Economic Justice.