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a blog from young economists at Nova SBE

Homelessness in the Rainbow State


Before starting to read this blog post I suggest you peruse the Cracked article on “6 Insane Realities of Being Homeless in Hawaii”. The article isn’t written by a scholar, but it is, however, written from the perspective of two current homeless men in Honolulu, Hawaii’s most populated island.

It is also crucial to understand that in the United States the poverty-line is established at a federal level and the same poverty threshold holds for the entire USA albeit with three exceptions in the form of Alaska, D.C., and Hawaii. These differences from the federal poverty line to the “exception guidelines”, however, are derisory and the subsequent lack of distinction in this definition leads to the curious fact that the state of Hawaii has the 9th lowest unemployment rate at 4.4%, the 7th lowest percentage of people with income under the poverty line at 11.4% – as opposed to the nationwide average of 16% – and yet boasts the highest amount of homeless people per capita in the US.

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The main cause of homelessness in Hawaii isn’t unemployment, but instead the fact that a large chunk of those employed can’t afford housing on the island. This is due to the fact that housing in the Rainbow State is 50% above the nationwide median, yet the average income per capita is merely 3% higher for the same two places.

If a substantial portion of employed people, let alone those unemployed, cannot afford housing on the island, then why is the percentage of people living below the poverty line so low? There is a simple answer to this question: It isn’t. The Census Bureau has worked to develop a supplemental poverty rate, whereby one of the primary differences between both poverty measures is housing costs. Accordingly, the two states with the largest increases in terms of poverty with the supplemental poverty measure— California and Hawaii — are the states with the highest cost of renting a house. This supplemental measure positions Hawaii at an 18.4% poverty rate, far above the official poverty rate stated above.

In fact, the Bureau of Economic Analysis has concluded that the metropolitan area of Hawaii has the second highest regional price parity in the US. This means that the price levels of goods and services are 16.2% more expensive in Hawaii when compared to the US overall of 100, yet the the income per capita has only a slight increase over the remainder of the US.


Furthermore, according to MIT’s Living Wage Calculator, the required living wage in Honolulu for a single adult is $14.66 per hour, which is in staunch opposition to the poverty wage of $6 per hour.

With the state now receiving a record amount of tourists, the mayor of Honolulu has now banned people from sitting or lying on busy sidewalks from 5am to 11pm in a bid to limit interaction between tourists and homeless people. This, coupled with the constant tearing down of homeless encampments, has led to the very vulnerable situation felt not only by the working portion of the transient population – now facing a trade-off between going to work and leaving their tent, with the risk of returning to an empty park or beach, or staying by their temporary home – and those who need to be actively looking for work.

Fortunately, the governor of Hawaii has recently declared a state of emergency about homelessness in the archipelago and there are now two solutions I can envision, one short and another medium-term (a long-term solution cannot be properly delved into within a blog post limit, as the underlying issue is the unbelievable prices of housing in Hawaii). The short-term solution is to put the $12 million approved on the 5th of May to use, not through the proposed alienating of the homeless population to Sand Island, which has already started, but through Housing First plans where the city provides housing for those who work and yet cannot afford permanent housing up-front.

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Hale Mauliola with single person units featuring 3 people per container. Sand Island homeless camp. 19 nov 2015. photograph Cory Lum/Civil Beat

Sending the homeless population to Sand Island is no solution, it’s a status quo thumbs-up from the local government: by having homeless people isolated and away from job prospects and opportunities disables them even further. The medium-term solution is much more complicated, as employment is already extremely low in Hawaii, leading me to believe that the only solution is to encourage further companies and businesses to develop on the island, be it through attracting foreign investment or through harboring entrepreneurial solutions from within. This needs to be done through NGOs such as SAPANA in Portugal, who is now thinking of opening a social incubator for ideas stemming from homeless people.


Francisco Duarte Lopes



Author: studentnovasbe

Master student in Nova Sbe

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