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The Honolulu Advertiser
Posted on: Sunday, February 26, 2006

COMMENTARY
Hawai'i's middle class is in trouble

By Michelle Takemoto

Most people like to think of themselves as average and middle-class, but the reality in this country and particularly here in Hawai'i is that the middle class is losing ground at an alarming rate. Recently, both daily papers ran articles regarding the widening wealth and income gap in America, and, not surprisingly, Hawai'i is one of the most unequal states.

With our housing shortage being exacerbated by skyrocketing property taxes and with the collective burden of rising costs for healthcare, retirement, education and more, living in a constant state of debt to meet our obligations and keep up appearances has become the norm. These trends are not only squeezing people out of the middle class, but also out of the state.

While the current debate over escalating property taxes has focused largely on senior citizens living on fixed incomes and rightly so, there also needs to be discussion on how this situation is affecting the entire community. Rental prices have been climbing sharply due to lack of inventory in a hot real estate market; now rents are going even higher as landlords pass on the cost of their higher taxes to their tenants. And sales of affordable rental units, such as Kukui Gardens, are further tightening the market.

Multiple generations living under one roof has always been a part of our local culture, but it used to be so that the younger generations could help care for their elders. While that is certainly still part of the equation, increasingly the reason behind this is because the younger generations simply cannot afford to move out, whether by renting or buying. Even those who do move out and actually buy homes often do so with financial help from their parents. Couples who leave the nest when they get married find themselves returning to their parents' homes when children come along in order to stretch their incomes. We all know families in these situations, if we are not in them ourselves. This was all happening to some degree before the current housing crisis, before property taxes shot through the roof, so how much worse is it now?

It should be no surprise that last year we in the U.S. spent more than we made for the first time since the Great Depression. In the American culture of "Every man for himself," and "If you're not doing well, you're doing something wrong," we all want to keep the appearance that everything is just fine: If our lives look OK, and our neighbors' lives look OK, then maybe we're all really doing OK.

So here in Hawai'i, people in their 20s, 30s and even 40s living with their parents out of financial necessity is considered perhaps inconvenient, but normal. We go into debt living off credit cards and loans in order to afford healthcare, college tuition, retirement, soaring gas prices, increased housing costs and car payments, while shopping at Wal-Mart, Costco and Ross to get by. We all know that many people here work two or even three jobs to make ends meet. But there are also many people working white-collar jobs that keep them away from home and family 80 to 90 hours a week and they are still having a tough time paying the bills.

The days of upward mobility are becoming a thing of the past. Many decent-paying union jobs have been lost with the demise of the sugar and pineapple industries, and we will be losing 700 more with the closing of the Del Monte pineapple operation. These types of jobs used to allow the children of workers to move up into the middle class. In the visitor industry, the unions are barely hanging on to middle-class wages and benefits, and if those are lost, the pay scale across almost a quarter of our economy could bottom out. In Hilo, 120 unionized jobs have been lost with the purchase of the former Hawai'i Naniloa Resort, and the owners at Turtle Bay are doing everything they can to push the union out. This is a moral outrage considering that the hotels are making record profits on the backs of our people. We keep hearing that the economy is doing well, but who is benefiting?

We are losing our middle class and taxing people further into debt or out of their homes. Fewer jobs that pay middle-class wages are available and people are carrying more debt than ever to support lifestyles that are quickly moving out of their financial reach. Many are making the difficult decision to leave Hawai'i in search of opportunity elsewhere, and those who are leaving are often from the middle class. Those who are truly disadvantaged cannot afford to leave.

If we allow these trends to continue, we will return to the old plantation days with only two economic classes: the very wealthy and everyone else struggling to get by. There was no middle class in Hawai'i until average working people began to talk to each other about the realities of their lives and what they wanted for themselves and their communities. There was no middle class in Hawai'i until people organized, socially and politically, for the common good. If we want to honor the struggles of our parents and grandparents and not let their victories go by the wayside, it is time for us to start having real conversations about who we are and where we are going as a community and start working together to preserve our way of life.