The ALICE Initiative: Combating Poverty in Hawaii

The ALICE Initiative is tackling poverty in Hawaii by addressing the financial struggles of households that fall below the ALICE threshold, promoting economic stability and mobility for vulnerable communities.

Hawaii, the 13th most densely populated state in the United States, has a capital city of Honolulu and a population of approximately 1.4 million residents.

Despite its idyllic image as a popular tourist destination and home to numerous U.S. military facilities, Hawaii faces significant financial challenges. Historically, the state had some of the lowest poverty rates in the U.S. and its residents are still grappling with increasing financial difficulties.

Households Below the ALICE Threshold

In response to the financial struggles faced by many Hawaiian residents, Aloha United Way conducted research and developed the ALICE (Asset Limited, Income Constrained, Employed) study.

The ALICE initiative identifies households that are financially struggling despite being employed. These households fall below what is known as the ALICE Threshold, which reflects the income needed to meet a basic household budget. According to John Fink, CEO of Aloha United Way, “over 200,000 are now under the poverty level.”

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While 44% of Hawaii's population is above the federal poverty line, they still earn too little to afford a basic household budget. Hawaii Island has the highest poverty rate at 17%, while Kauai has the lowest at 14%. Native Hawaiians are disproportionately affected, with a poverty rate of 27% compared to other groups in the state.

The rise in poverty rates from 8.8% in 2018 to 15% in 2022 can be attributed to several factors, including the government’s inadequate response to the pandemic and the state’s deep wealth inequality. The situation is further exacerbated by the fact that more than three in four Hawaiian households carry debt, with one in three households below the ALICE Threshold struggling to manage significant debt.

COVID-19’s Impact on Residents

Households below the ALICE Threshold faced disproportionate hardships during the COVID-19 pandemic. The economic strain and disruptions to daily life were felt most acutely by these households as many residents fell ill, became unable to work, or lacked suitable childcare. These challenges contributed to a rise in mental health issues during the pandemic.

In addition to these struggles, households below the ALICE Threshold faced difficulties in paying off debt and meeting household expenses. Reports indicated a reduction in wages and working hours, further exacerbating the financial difficulties for many.

In 2022, 77% of households below the ALICE Threshold felt the financial impact of the pandemic. For instance, 37% of these households struggled to pay household expenses during the pandemic, and 33% are still facing the same challenges today.

Looking Ahead

Hawaii's pressing issues of resource distribution and wealth inequality need urgent attention. The Aloha United Way and the Hawaii Community Foundation are addressing these challenges by investing £4.5 million into the ALICE fund over the next three years. In addition, they are leading a coalition of 17 non-profits focused on increasing financial stability and economic mobility for those living below the ALICE Threshold.

By tackling these systemic issues and providing targeted support, Hawaii aims to create a more equitable future for all its residents. However, further progress is necessary to ensure that vulnerable populations receive the help they need to overcome poverty and achieve financial stability.