There are multiple factors that cause an increase in living expenses for residents of the state of Hawaii, resulting in cost of living prices that are 2/3 higher than the rest of the United States. Hawaii has consistently been known for the most expensive cost of living in the nation and explaining why it is known as the worst area to make a living. Historically, the remarkably expensive cost of living in Hawaii is due to the necessary transportation of overseas goods that allow life on the island.
The high cost of living has transformed into a social justice issue as it applies to the entire population rather than a select group of people. However, low-income families are most severely impacted as they suffer from economic disparity. The number of people that desire to move to the islands continues to grow, but there is also a decreasing opportunity for many people to do so.
The state of Hawaii currently faces some of the highest real estate and utility prices, transportation costs, grocery expenses, and healthcare fees in the nation.
The current high cost of living in Hawaii is continuing to increase at a constant rate, resulting in a decrease of individuals able to live in the Hawaiian Islands, especially local families and low-income individuals. Hawaii’s housing market has progressively become more competitive as years pass while the population is continually increasing. Within Hawaii’s real estate system, it is difficult to find a house that is affordable to fit the needs of both yourself and your family while allowing the purchase of necessary utilities.
The most relevant factor that directly affects why expenses are increasing at a continuous rate is the limited amount of land within Hawaii that is suitable for the construction of housing.
Hawaii is one of the most popular vacation destinations in the nation, but those who visit are also interested in eventually owning a house on one of the islands. The population is expected to continually increase because educated research illustrates, the 2040 population projection shows that Hawaii’s population will increase by a total of 280, 363 people over the span of the next twenty-two years. To accommodate the projected population in the year 2040, an approximate total of 116,300 new houses or apartments would need to be built by 2040. While housing prices continue to rise, there is a higher demand for affordable housing for workers crucial to Hawaii’s economic success that are not wealthy enough to own a house on the islands.
Hawaii is the most expensive state in the nation to purchase a home. In a national report from Coldwell Banker, the average listing price of the typical household, four-bedroom two-bath home in Hawaii costs $904,954. This is $325,000 more than the next highest state, Massachusetts, averaging $577,855. It is difficult for large Hawaiian families to justify purchasing a home instead of renting an apartment or house due to the increased price of buying versus renting. This leaves the family financially stable in the short term, however, in the long term they begin to experience financial issues as they haven’t purchased property or started to pay off their mortgage, resulting in a constant monthly payment rate for the duration of their rent. Not only are the housing prices a significant issue, the cost of utilities necessary for a household, including electricity and water services are extra expenses with increased rates on the Hawaii islands.
Utilities are a crucial aspect of living and “Hawaii’s cost of electricity for the residential sector is the highest in the nation at 37 cents per kilowatt an hour, which is more than three times the national average of 12 cents and twice as much as the cost of electricity in Alaska, the second most expensive state”. This highlights the idea that people are forced to put large amounts of money aside in order to pay for their needed utilities but they aren’t able to focus on aspects of their life that need extra attention such as their health concerns. According to the policy report “Hawaii’s Affordable Housing Crisis” developed by Hawaii Appleseed Center for Law and Economic Justice, “Affordable housing is associated with better health, childhood development, and educational achievement because it frees up a family’s budget for more nutritious food, access to medical care, and quality childcare, and it provides stability where family members can thrive”.
Overall, if the housing prices in Hawaii were reasonable, then that would help families maintain successful and healthy lives. There is a wide variety of people who reside in Hawaii, and this results in inequality involving wealthy individuals compared to those in poverty. The current health care system in Hawaii requires refinement in hope of making medical help more accessible to all individuals, as current rates are too expensive for the average income individual to afford healthcare. Healthcare applies to everyone throughout the nation because medical attention is needed to ensure healthy and balanced lives in the future. It is important for the highly populated community to maintain healthy lifestyles in order for them to fight against diseases and decrease the chance of any type of injury that would cause them not to live their life to the fullest.
The Grassroot Institute of Hawaii conducted a study to measure how accessible each state’s health care system is to both patients and providers, Hawaii was ranked as the 41st overall state out of 50 in the category measuring flexibility for insurers. Hawaii was also ranked as the 46th overall state in the category of support for Direct Primary Care Practices (Akina). Hawaiian citizens are faced with the challenges of not having the quality or flexible insurance, causing them difficulties acquiring proper healthcare. With the current changes to the healthcare legislation, Hawaii is predicted to be heavily impacted through loss of medical coverage. An article by Families USA predicts that a total of 86,000 residents in Hawaii will lose their healthcare coverage, and 11,000 residents who currently receive financial assistance will be forced to be individually reliant on their payments.
The state as a whole stands to lose four billion dollars in federal funding for Medicaid, Child’s Health Insurance Program (CHIP), and financial assistance. These statistics are alarming as many locals rely on financial assistance as their main source of payment while paying off medical-related bills. In a Hawaii News Now local article, the author Leland Kim interviews Dr. Chiyome Fukino who states “This health care crisis extends to both public and private hospitals. Every single hospital in this state is faced with similar issues of being under-reimbursed and mounting costs of providing quality care. Every single hospital in the state is faced with similar financial difficulties” (Kim).
Although many are affected by the healthcare crisis, a large majority of those who don’t utilize healthcare on a regular basis aren’t educated about the existing financial struggles within the healthcare system. The prices of everyday commodities such as transportation and food are increasing, further exacerbating the issue of the high cost of living for the residents of Hawaii. In years past, the main reason for the high cost of living in Hawaii is due to the difficulty of transporting necessary goods overseas. Hawaii has a variety of options for public transportation, but the state of Hawaii has one of the highest rates for annual car sales at dealerships on the island. Public transportation is a necessity for tourists, but residents are more interested in purchasing a car, so they don’t have to rely on the public transportation system.
Another key reason that people strive towards having their own car is that it allows them to search for a job that might be out of the public transportation range. The opportunity to find good-paying jobs is difficult on the Hawaiian Islands, so this provides a better chance for an individual to become wealthy and be capable of providing a good life to their family. Gas prices are increasing at a continuous rate while “In October 2018, the regular gasoline price in Hawaii averaged $3.878 per gallon, which was $1.01 per gallon (35.2%) higher than the national average for the same month. On the islands you are not required to drive as long of distances as you are on the mainland, so even though in Hawaii you do not drive as far of distances, the traffic and price of gasoline worsen this specific situation involving transportation.
Within the state of Hawaii, residents are becoming more inclined to use the existing public transportation options as their main form of transportation as the gas prices have increased by 16 cents within a span of a couple of weeks, directly impacting local customers on a daily basis (Mari). Oahu is the only island that has federal highways and the traveling efficiency can be slow due to the congestion within the city of Honolulu and the back roads throughout the country. A separate pricing issue revolves around the insanely high food prices people within the community have to pay in order to provide for their families. As families face difficulties paying their monthly rent, they also come across the issue of potentially not having enough money that specific month to purchase groceries. As an influx of tourists come to visit the Hawaiian Islands they become shocked due to the comparison of the grocery prices to the prices they are used from where they call home.
According to an article posted by Honolulu Civil Beat, a study completed by the US Department of Agriculture discovered that “The food prices in Hawaii are 70 percent more than the national average. According to the USDA’s calculations, a family of four with young children nationally should be able to eat on a ‘thrifty’ food budget of $373 per month. In Hawaii, it would cost the same family $632 for the same meals” (Murakami). It is evident that in order to survive in the state of Hawaii, you need to find a job where you are able to make a high enough income so as a result, you are able to purchase the types of groceries you desire to live a healthy, successful life. Many people in Hawaii experience the struggle of not earning a high enough salary which causes many locals to move to a state with less financial burdens. Everyone looks at Hawaii as the perfect place to vacation to, but they do not realize that the cost of food, transportation, and housing is increasing at a rapid rate.
Hawaii has been known as the worst state to make a living in for multiple years in a row. Honolulu has the lowest adjusted salary in the nation as the average salary is an amount of $74,553, but when modifying the salary along with the cost of living, the salary decreases by $14, 671 to be $59,882. The significant difference in the adjusted cost of living makes Honolulu the lowest adjusted salary in the nation (Akina). The adjusted income is a significant indicator that proves Hawaii’s approximate average salaries are particularly low, and a family earning this amount of money will not be able to support themselves financially. Supporting the fact that Hawaii prices are rising, in a report done by the Hawaii Appleseed Center for Law and Economic Justice they discussed how “A quick visit to the mainland will remind any Hawaii resident of what they face on a daily basis- the highest cost of living in the country.
Comparisons of Hawaii’s elevated cost of living range from 17 percent to even 60 percent higher than the national average. On a local level, Honolulu’s cost of living exceeds even those of New York and San Francisco”. Even though Hawaii is considered paradise, people have to consider whether they want to live somewhere based off of an appealing location versus a different location that is easier to achieve financial stability. Based on nominal incomes, the real value of $100 in Hawaii is $84.46. This compares to other states that are known for being expensive such as California at $87.41 and New York at $86.51. On the other side, $100 is worth $115.74 in Mississippi, meaning Hawaii residents are on average 15 percent poorer than the national average, while Mississippi residents are 15 percent wealthier (Akina).
This demonstrates that products are more expensive in Hawaii, causing the value of $100 to be considered less than in other mainland states, as you can purchase less with it. The US Census Bureau estimates that from July 2016 to July 2017, a total of 13,537 more people left Hawaii for the mainland than moved in from another state. This trend has continued over the past five years as 37,000 more people have left Hawaii to live on the mainland while fewer people moved into Hawaii. Wealthy individuals who weren’t originally from the Hawaiian Islands are rewarded with the ability to sustain a successful life while local Hawaiians experience the opposite situation risking the chance of being forced to move away from their home state. The current situation involving Hawaii’s cost of living directly impacts the lower-income communities as they make an effort to make ends meet with their limited funds.
It is devastating that these individuals are affected by the required expenses and that they are forced into living in these types of conditions. Normally, the lower-income families end up being originally from Hawaii. As discovered in a research study on Native Hawaiians, “Per capita income for Native Hawaiians in 1989 was $10,700, compared to $16,000 for non-Natives. Native Hawaiian households are more likely to be very low-income than non-Native Hawaiians. Just over 27 percent of all Native Hawaiian households have incomes less than 50 percent of the regional median compared to 22 percent of non-Native Hawaiian households”. This helps exemplify that a large number of local Hawaiians experience the negative aspects of income equality. Certain Hawaiian families live with multiple generations of their ancestors, and a select few individuals earn the money for the household.
They heavily rely on their relatives to achieve economic stability and this can be a reason for why the economic disparity exists. In today’s society, to qualify for affordable and subsidized housing programs through government aid, a family of four residing in Honolulu can currently make up to $93,000 and be considered low income, this is $9,600 higher than a year ago, increasing by 11 percent. Since Hawaii’s standard of low-income salaries are consistent with continental U.S. values of a middle-class salary, Hawaiian locals are born at a deficit forcing to seek occupations solely off of income to keep up with increasing expenses. The major issues that directly impact Hawaii’s lower-income population need to be solved. The core expenses for people living in Hawaii are increasing at a high rate making it harder for locals to make a living within their home state. It is becoming challenging for local Hawaiians to keep up with the changing economic state of the island as expenses increase.
If prices continue to increase rapidly, the population of Hawaii will grow to consist of individuals who aren’t originally from here. Those who make the major decision to move to Hawaii are aware of the fiscal responsibilities prior to moving, where locals are born with the task to live in a financially competitive environment. The existing factors including the real estate system, healthcare, transportation, and food contribute to the reason for Hawaii’s present financial state. Local Hawaiians are becoming frustrated and upset with the fact that they can’t find a job that provides them with a salary allowing them to live a normal life. The current income disparity that exists within the state of Hawaii needs to be addressed as the lower-income communities are being impacted heavily by the constant rise in expenses.