The Price of Paradise: The Harsh Reality for Hawaii's Middle Class

so it's hard to imagine that a hundred thousand dollars a year in Hawaii is just not enough I was scrolling through the news feed and that headline caught my attention because frankly we are definitely feeling it now this hundred thousand dollar figure comes from the Alice report from the Aloha United Way and it basically describes people who are struggling to get by but work and earn enough where they don't qualify for government assistance basically your Hawaii lower middle class and that category is quite wide as an ALICE household ourselves I just wanted to share how things are I mean the struggle is definitely real I want to go over some numbers and just kind of talk about things like housing and general cost of living and more so put a face onto these numbers because we hear about how expensive Hawaii is but maybe we don't often see it and I don't really mind sharing I'm also curious how people manage to live in Hawaii because based on some of these figures I just don't see how it's mathematically possible and I am not looking forward to the day when plate lunches are twenty dollars foreign what is an ALICE family well it stands for asset limited income constrained employed basically someone who earns above the federal poverty line but again does not qualify for government services or certain programs so if you want to read the entire report I put a link below but one of the things that stood out to me was the Alice household survival budget and that to me was the most shocking basically that's just the cost of living Essentials things that you just need to get by and so for a family of four in Hawaii you need about 85 812 dollars which if you look at as a percentage increase from 2019 that's an 18 increase and for a single person it Rose to thirty six thousand nine hundred and twelve dollars which is a 26 increase from 2019. and sort of thinking to myself those are very big increases in just the matter of a few years and based on what happened with the pandemic I mean it's really hard to imagine that people were able to keep up with this huge increase of cost I mean my salary didn't increase by 18 percent get yours the numbers also find that 12 of Hawaii households live below the federal poverty line with 30 percent considered to be Alice which means that 42 percent of people in Hawaii are Alice or below and I've seen this report several times before and it never really bothered me all that much except this time I happen to notice that there was a category that talked about eligible tax credits and so looking at the numbers that 85 000 Mark also assumes that you take a child tax credit and a Child Independent care tax credit so basically you'd actually have to earn more so for our situation a family of four with two kids one preschooler and one infant we need to earn 149 000 before taxes because with the eligible tax credits that now reduces our need to a hundred and twenty one thousand dollars now it's definitely possible not saying that it's impossible the problem becomes with child care costs and if you have child care costs here in Hawaii you know it's quite expensive and so you have to ask yourself okay is it worth paying the child care costs for typically the mom to go out and work and for a lot of families it just is not worth it and so a lot of times they end up staying home okay so let's talk about housing in Hawaii now and it really is the hardest challenge and I've talked about this before on my YouTube channel that housing is going to be the biggest challenge that this state faces and probably will ever face forever it's just that seems to be the biggest issue that's really kind of pushing people to leave the cost of housing is just so high and the salaries just can't keep up that there's nothing much to do and that's not to say that projects aren't being developed I mean if you look outside you can see that in town area at least there's a bunch of cranes and there's movement and things happening but the question is who is going to be buying these places is it going to be locals or is it going to be other people whether it's for investment properties or just people coming from all over the world what also worries me about this is that a lot of these projects are in progress they're not done yet and when they were probably penciled in the interest rates were a lot lower and so people could buy more at the time they felt very confident but now years later interest rates are going up and when these projects are built I'd be very nervous if I was a buyer because I'm not sure I could then afford it and then what are you supposed to do of course down payments are very difficult to come by because everything costs more it's harder to save money while you actually live here maybe not so much if you live in other places where you can work and save sell your house and you come here and now you have a whole bunch of cash when you're currently living here it's hard to do that and it's especially difficult I think for people in our situation where we own a place which is wonderful that we own a place the thing is we need to get a bigger place and so we're in this market where we're both now the seller and the buyer and how is one supposed to make that transition and so while we love to sell it for an affordable rate the fact is we can't because we're not going to be able to buy another unit at an affordable rate and so we have to basically max out what we can get for our place in order to then just be in the running for other fair market units I wish there was a way where we could sell to a local family that can barely afford it you know with the guarantee that we could then move into another unit that someone would then sell to us I know that's not how the market works I just I kind of wish there was some kind of program like that because that way local people could sell to other local people and they don't have to feel bad or guilty if they feel that when they have to sell it to anybody that they know is probably not going to live in it or that maybe they're just gonna knock it down and just basically flip the property but what are you gonna do right you need the money and so oftentimes it just goes to the highest bidder and so now let's talk about child care costs and again this is like not to bring it down but this is how it is now in Hawaii especially for our family as we're going through this and maybe other people can relate to if they got kids but Child Care is not cheap here you're looking at at least thousand twelve hundred dollars a month and for a lot of people that's okay and for us we've been planning for this and so we have money saved so that our son can go to preschool but I think about the situation for many other families that don't have the money saved up or they just can't afford that monthly payment and I know that the state just announced that they recently are going to start 11 new classrooms across the state and that they're really trying to beef up that pre-k program in public schools which is very much appreciated the issue though is it's just kind of slow especially for our family by the time that they get the preschools into I guess all the schools some both of them they're not going to need it anymore and I know it has to start somewhere and I know that this takes time but as someone who's living today we sort of need it today and although they expanded the public preschool to three-year-olds not just the four-year-olds there's still this sort of hierarchy of qualifications a lot of it has to deal with where the school is located and if you're in that District area because if you're in that area then good for you you can send your kid there assuming that there's room but if you're not in that area like for us there's no preschool in this district for us we kind of are out of luck and so we'll be wait listed and pretty much put near the back of the line and again just from a financial standpoint we don't qualify for a lot of these Public Assistance programs I wish we did but we don't and I guess that's a good thing some might say but at the same time it's also kind of hard because well it would be nice if we could get assistance with that but we we just can't and it doesn't mean that we also don't need help I understand they have to prioritize low-income families and people who really really need the help but there's again this whole group of people I guess Alice family is that yeah we we can pay for it it's just it's kind of hard we're also not native Hawaiian and so that kind of puts us out on certain financial aid and the last thing I want to talk about on this mention are just some of the general challenges of the cost of living which is like this General category but really more about things like utilities and food I don't know if other people have noticed but I've definitely noticed in recent months at least the past six months for sure but our food budget has gone up by like 20 but I guess in a lot of ways this makes sense because according to the US Department of Agriculture the food Consumer Price Index has increased by 20.4 percent from 2018 to 2022. yeah I can definitely see that and again we make too much to qualify for SNAP benefits which I used to have when I was single and just a recent college grad and very much appreciative of that program but we don't qualify for that here and it's kind of too bad because we shop at farmers markets and I know that in Hawaii at certain farmers markets the SNAP benefits are actually worth double which is huge I mean I don't know how many people are taking advantage of that but if we qualified for a snap I would be going to farmers markets and buying up all kinds of stuff because you basically get double your money's worth it supports local farmers but at the same time it supports a healthier option for food and so how are local people coping with this because I look at these types of reports and sometimes I get like oh my gosh what is happening here and then I think wait what about other people if that's truly the income levels that we have here and the types of jobs and and salaries how do people actually cope with living in Hawaii how is it that the struggle is not overwhelming for them and so here are just my guesses based purely off of assumptions and observations not on any data but this is just how I think the people are making it the first way is I think there are a lot of people with fixed incomes here in Hawaii they're just retired at this point whether they were born and raised here and lived in Hawaii all their life or they're from the mainland or other parts of the world they just come here they don't have to work they just have a fixed income they bought a property they don't have any house payments they own the house and basically they're just relaxing and just living that dream of retirement and probably their only expenses may be General life expenses like food utilities and property taxes and if they have grandkids just spoiling the grandkids there are also adult children who are living with their parents and by living at home you cut the biggest expense you'll have here which is housing expenses I mean that really is the best way to save money live at home I mean I did that while I was saving for my place here and that was the only way I really could stop to save money because if I was paying rent at the time there would be no way I could have saved enough for the down payment or better yet you could inherit a home where now you don't have to pay for any housing you're just living it because your parents died and passed it on to you another way is to basically live off of credit according to the report of the people who were surveyed 35 took out personal loans to be able to survive these past few years 40 percent borrowed money from family members and 75 percent used credit cards so you can imagine that there is a lot of credit and debt floating around and as I look out and just see people in general you would never know it right you look online and see what people drive see what people buy see what people eat and things look great they look wonderful it seems like everyone's back to normal but I think underneath all of that even though we want to live this same type of Lifestyle you can't afford it then you're just going to more and more debt it's really going to get you eventually and this is why I think in Hawaii we desperately need more financial literacy classes like in K-12 I wish we would teach kids how a budget Works how to create a budget and basically don't spend more than you earn and then just looking at the numbers again I'm completely baffled at how do people survive on an income of let's say thirty five thousand dollars at least that's what the numbers show us and although unconventional and something I don't highly endorse I think that there's a lot of people in Hawaii or maybe I shouldn't say a lot but I think that there are some people I think we can safely say that who operate on a cash based system who are working under the table and so there's less money to report on income taxes now of course you're not supposed to do that but we're kind of a laid-back Uncle will help you out with this type of thing and I do think that it goes on there was report that the Department of Taxation was going to start to go after some of these cash based businesses especially some that are like at farmers markets where it's kind of hard to track and figure out what the actual sales numbers are if everything is just done in cash again I'm not here to accuse anyone but one does have to think how the heck do people afford to live here if they're only reporting on their taxes Thirty to forty thousand dollars a year again not something that I support but I just assume that that has to happen and I think when we look at the collected tax revenues income tax revenues for this past year we can see something happen because the Council on revenue is made a very aggressive projection early on that we would have a lot of income tax revenues and other taxes coming into the state for ultimately the state budget but if you look at what they reported it's a lot lot less and a lot of it came from not collecting as much income tax and so I wonder where that all went I know people left Hawaii and sure some of their income tax went with them but it couldn't have been all of it right and the last way and probably the most obvious is to just get on public assistance and I think this issue is really hard because you do want to help people who need the help but at the same time if you look at it it just doesn't make any sense if you're on public assistance to ever get off public assistance because what you'd have to earn to live comfortably is probably more than you can at least in the short term and so let's say you're on that cusp and you're earning the most you can to qualify for the most amount of benefits as soon as you earn a little bit more the benefits that you lose would be tremendous and your quality of life would then go down and so because of that I don't see the incentive in ever getting out of that is that something in the state that we want to promote I hope not because it's really something that's supposed to assist people not something for them to necessarily rely on and again like I mentioned when I was in Oregon I did need SNAP benefits because I really could not afford you know I was working two part-time jobs barely making minimum wage and so I needed the extra assistance to get basic things like food but eventually I moved on and moved places and got a better job and so I think this is kind of a sad reality right just trying to figure out people trying to figure out ways to stay qualified for public assistance whether you become a single parent or I don't know all the strategies and I'm sure people have figured it out but it is kind of sad to think that there are people who could do a lot more who could contribute a lot more but they can't and they don't feel like they can because they were to try they would lose out on so much now I really enjoyed the Alice report whenever it comes out I actually participated in this video campaign that they had and I remember when we went to go and film that campaign it was so interesting seeing all these different people and yet we all shared this similar experience in being in this type of financial situation and at the time I remember thinking well you know we're in Alice family but you know it's not bad but now a couple years later I'm thinking I start to wonder whether it's worth staying it's kind of I don't want to say amazing but it's interesting to watch that as my salary has kind of continue to go up a little bit we're actually sliding backwards and every time I see the new numbers for the average median income we're sort of going down like percentages every single year and yet I don't feel like we're any poor but that's just because the cost of living is going up so much and so fast I know that we're also not the only ones experiencing this and for us the choice to live in Hawaii is really a choice and we're going to try our best to make it I know that there are also a lot of families who are just on the verge of making that switch and it's really sad to see that I don't know what the solution is for people like us you know where we're trying our best we budget we do all these things and it's just hard to get ahead it's hard to get something as simple as a two-bedroom for us not as an investment property but just so we could live but in the meantime we're just gonna keep hanging in there and keep trying so thanks for watching and aloha hello hello hello hello hello hello hello hello [Music]

Channel: Hello From Hawaii

Views: 17,182

Keywords: living in hawaii, Life in hawaii, what is it like in Hawaii, Moving to hawaii, hello from hawaii, hawaii, oahu, honolulu, hawaii life, life on hawaii, hawaiian life, hawaii is expensive, hawaii alice families, middle class hawaii, hawaii middle class, 100K in hawaii

Id: fmDCbT4rCrI

Length: 19min 28sec (1168 seconds)

Published: Wed May 24 2023