Health equity leaders discuss “innovative” legislation and financial opportunity programs for ALICE housholds

In the final installment of a three-part conversation series, Hawai‘i health equity advocates gathered to share innovative strategies that support asset-limited, income-constrained, and employed (ALICE) communities. The panel highlighted key legislation and financial opportunity programs that could benefit a significant portion of Hawaii households.

 

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A 2017 report from Aloha United Way (AUW) found nearly half of households in Hawaii (approximately 212,000) were classified as ALICE or below (in poverty), meaning they struggle to afford basic needs such as housing, food, and health care. That percentage could be as high as 59% in the wake of the pandemic, said John Fink, AUW CEO.

Hawaiʻi has the highest cost of living in the nation. Gavin Thorton, executive director for Hawaiʻi Appleseed, estimated a family of four would need an annual income of $90,828 to afford basic needs. Some of the largest financial burdens for these families include housing, child care, and disproportionate taxing, Thornton said. 

 

Image: Hawaiʻi Appleseed

 

Thornton explained that a “severely unbalanced” economic system is pushing ALICE households further below financial stability. For example, Thornton described the paradox families face in the housing market: 

“Annual rent [in Hawaiʻi] has increased by $1,000. If you’re a high wage earner, that’s no problem — you’re earning $25,000 more than you were [in the 1980s]. But if you’re a low or middle income wage earner, your increases in income haven’t nearly kept pace.”

Deborah Zysmen, executive director of the Hawaiʻi Children’s Action Network (HCAN), emphasized the full scope of which households the inequities impact.

“We’re talking about 60% of the population now. Again, we often have programs and services for our very low income families, but that’s not what we’re talking about here. We’re talking about most of us, our middle [wage] earners.”

Based on their research, Hawaiʻi Appleseed and HCAN outlined target reform areas they believe will have the largest impact, including progressive taxation, increased cash flow, affordable housing, and early child care and education. 

One way to increase cash flow for ALICE communities is through a payday loan reform bill that will take effect in January 2022. 

Before the reform, individuals in Hawaiʻi seeking loans to help pay for rent and other necessities were paying 460% interest rates, with only two weeks to pay them back, according to Gabriel Kravitz, a consumer finance officer at the Pew Charitable Trusts. The reform bill clarified license requirements for lenders, extended payback periods, and put in place interest price caps, which reduced loan prices to a fraction of their original cost. Kravitz said:

“That’s major savings that consumers are going to be seeing and families are going to be able to put back into their budgets [and] put back into the local community.”

Other economic solutions include investing in financial opportunity programs for ALICE individuals. Jeff Gilbreath, executive director of Hawaiʻi Community Assets (HCA), shared the organization’s plans to integrate a Career Ladder Identifier and Financial Forecaster (CLIFF) in Hawaiʻi, in partnership with the Federal Reserve Bank of Atlanta. 

The tool will help individuals who advance financially (for example, a person becomes a certified nursing assistant and earns a higher wage) better understand and prepare for when their eligibility for certain public benefits, such as SNAP, expire.

See a projected timeline of increased financial self-sufficiency below: 

 

Image: Hawaiʻi Community Assets

 

Gilbreath encouraged attendees — including policymakers, health care workers, and the nonprofit sector — to continue advocating for ALICE communities: 

“As COVID made the economic pain families are experiencing more prevalent … there’s things that you can do as an employer or as non-profits who have folks in the door. 

Paying community members to participate in community engagement activities. Maybe there is a paid time off opportunity for folks to be able to advocate at the legislature … I think we can continue to move progressive economic policies that will help ALICE and below households, and really, all of Hawaiʻi.”