Working families deserve better.
Hawai’i legislators routinely espouse platitudes about their desire to uplift our state’s most economically marginalized residents. For our most financially challenged neighbors, however, this year’s legislative session was a mixed bag at best.
To their credit, lawmakers enacted tax relief that will boost the bank accounts of the islands’ lowest wage earners, including proposals to double the earned income tax credit, more than double the food/excise tax credit, and increase the child and dependent care credit.
According to an analysis conducted by the Hawai’i Children’s Action Network, the vast majority of the intended $128 million in tax relief will benefit the state’s bottom two income quintiles, which include taxpayers earning less than $52,000 per year.
Additionally, policymakers spent tens of millions of dollars on loans to low-income families for the installation of solar systems, devoted $60 million to increasing reimbursement rates for the Medicaid insurance plan that primarily covers low-income and disabled residents, dedicated over $38 million to expanding preschool access in underserved communities, and made meaningful, if not ambitious, investments in mental health and affordable housing.
Each of these measures will advance the economic well-being of local communities. Yet, when most households are besieged by Hawa’i’i’s perennially escalating cost of living and the government’s budget surplus was projected to exceed $2 billion to begin the year, legislators failed to seize the moment to deliver transformational change for the working class.
Once again, elected officials did not seriously consider proposals to implement comprehensive paid sick and family leave programs. In Hawai’i, an estimated 42 percent of private sector workers lack paid sick leave, according to a 2015 analysis by the Institute for Women’s Policy Research, including only one in five low-income workers.
Seven in ten children have both married parents or their lone single parent in the workforce, according to Hawai’i Children’s Action Network Speaks, leaving them without a full-time caregiver. Additionally, AARP Hawaii notes that there are nearly 157,000 unpaid caregivers helping our state’s aging population, representing about 40 percent of the local workforce.
Paid sick and family leave programs ensure that employees can sustain their financial health when medical emergencies arise. Ultimately, those individual benefits enrich our entire society. Mothers with access to paid family leave, for example, are 39 percent less likely to receive public assistance after the birth of a child than those without access to the program, saving taxpayers money year after year.
Political leaders also allowed important labor proposals to lapse, even when those measures carried no fiscal cost. House Bill 1087 would have closed a loophole in the state’s minimum wage law that allows businesses to avoid paying minimum wage increases by redesignating hourly workers as salaried employees.
The measure received unanimous support from the Department of Labor, local unions, and economic justice advocates. Nonetheless, it drowned in the murky waters of the legislature’s conference committee process, despite the House and Senate agreeing to draft language during session that had no impact on state revenue.
Finally, legislators missed an opportunity to adopt bold proposals to alleviate the adversity experienced by working families. With an unprecedented fiscal surplus at their disposal, policymakers could have tackled the price of paradise by expanding food programs for financially vulnerable residents, establishing a child tax credit, exempting unemployment insurance from the state income tax, and making community college free.
Lawmakers have shown support for some of these ideas before. In 2021, the State Senate passed a proposal to eliminate the income tax on unemployment payments, largely to help the thousands of workers who lost their jobs during the pandemic. With the state’s unemployment rate currently hovering at just over 3 percent, this exemption would be significantly less costly to implement today, while still providing invaluable respite for families that are facing an unexpected disruption in their paychecks.
We are just finishing the first year of the current legislative biennium. In 2024, legislative leaders will have an obligation to soothe the political turbulence that caused many of this year’s best policy ideas to capsize. For the sake of the hardworking women and men who form the heartbeat of Hawai’i’s economy, let’s hope they summon the courage to put people’s needs before political gamesmanship in the pursuit of prosperity for all.
