Hawaii’s high cost of living has long been a source of pain and anxiety for working families, but for many ALICE households — those who are “asset limited, income constrained and employed” in the analysis of the Aloha United Way (AUW) — the struggle has become too much to bear.

ALICE households earn above the federal poverty line, yet fall short of meeting the rising cost of basic needs: housing, childcare, healthcare, transportation, food and “technology,” meaning access to the internet, a factor linked to income levels and well-being. And these households, which include a disproportionate number of families with young children and Native Hawaiians, are those most vulnerable to another blow: being forced to leave Hawaii.

The latest analysis of ALICE families’ plight is contained in the 2024 “ALICE in Hawaii” report from the AUW and Bank of Hawaii Foundation, which collects information about households statewide. It shows that while Hawaii made some post-pandemic progress in reducing the percentage of households below the poverty line — 12% in 2024, down from 14% in 2022 — the proportion of ALICE households remained unchanged at 29%.

Further, more than 33% of households surveyed in 2024 reported that someone in their household considered moving out of state. The overall cost of living and housing costs are primary factors.

“If that 1 in 3 doesn’t sound too terrifying, that means 180,000 people right now are considering leaving the state of Hawaii — from our workforce, from our younger families, our Hawaiian families,” said AUW Chief Operating Officer Suzanne Skjold.

In Hawaii, the cost of paying for basic needs rose even faster than the national rate of inflation, according to ALICE studies — and that hurts families that are struggling financially the most. A 2023 ALICE survey gives some indication of the stress these households experience: 16% of those with incomes below the ALICE threshold reported “feeling nervous, anxious, or on edge nearly every day.” That’s down from 20% in 2020, but almost twice as high as the stress reported by households earning more than the ALICE threshold.

The impact has been heightened in Maui County, which suffered from the effects of the devastating wildfires of Aug. 8, 2023. A disturbing 30% of Maui households reported spending more than they earned in the year since, compared with 24% statewide.

The ALICE threshold is calculated on the basis of a household “survival budget,” which takes household size, income, taxes and tax credits into account, as well as county-specific costs of living. Hawaii’s families took a big hit here between 2021 and 2022, when federal tax credits and stimulus payments expired, and wages rose only slightly: This reduced the budget of a statistically “average” family of four earning about $108,000 by nearly $15,000, while the cost of living rose by about $3,500. These data points go a long way in explaining the pervasive sense that life in Hawaii is becoming untenable for working families.

What’s to be done? Above all, Hawaii must address the cost and supply of housing. Hawaii’s Housing Affordability Index shows that the cost of a single-family home or condo unit has about doubled since 2000. Gov. Josh Green has made housing affordability a centerpiece of his administration, and Green said in his State of the State speech Tuesday that about 23,000 new units will be completed by next year. Voters in every county must remain attentive to this issue to ensure that the state Legislature and county governments contribute fully to this effort, through 2026 and beyond.

Next, vigorous and sustained programs and policies to raise incomes for working people in Hawaii are required. The Legislature did not go far enough in raising Hawaii’s minimum wage in 2022: It rose to $14 in 2024, but should be at or above $16 to bring workers in line with minimum costs of living. Training and education programs tailored to raise Hawaii workers’ earning potential need to be turbocharged. And tax reform is another valuable tool to assist ALICE households, as the fleeting rise in incomes provided by pandemic-era government tax credits and stimuli proves. Hawaii has adopted tax changes that benefit working families, and the Legislature must be held to this commitment in coming years.

As these necessary changes evolve, support from nonprofits and private philanthropies is invaluable to Hawaii households’ survival. In a promising development, AUW and the Hawai‘i Community Foundation (HCF) have joined forces to administer a 2025-2027 ALICE Initiative Cohort — offering funding support to Oahu nonprofits working to bolster local households’ financial stability, access to affordable housing and workforce opportunities. The idea is to empower nonprofits “to initiate substantial change” using a “collective impact model” — it takes a village, in other words.

AUW and HCF are looking for “innovation, advocacy, and strategic interventions to elevate ALICE households into upward economic mobility.” Yes, please.