KS subject matter experts currently author quarterly columns on spirituality, KS history and data and research. Look for future columns on sustainability and natural and cultural resource management. In this "Data Matters" column, KS Research Associate Justin Hong examines the evolution of the living wage in Hawaiʻi and the importance of earning a living wage for Native Hawaiians today. To view more columns, visit the I Mua Newsroom "Columns" section archive.
The ability for individuals to earn a living wage (livable income) is important in the modern context in which we live. Earning enough money to provide for basic needs means that individuals are able to engage in other meaningful activities such as education, service and leisure.
In addition, individuals who earn a living wage have greater access to the resources necessary to support a family or invest in the community.
In ancient Hawaiʻi, “wage” was a concept unknown to the population. It was not until the arrival of foreign peoples that the concept was gradually introduced to Native Hawaiians.
Before foreigners came to the islands, Native Hawaiians lived as a communal society. Moku puni (islands) were divided into moku (land divisions), which were further divided into ahupuaʻa (smaller land divisions).
Within the ahupuaʻa resided an ʻohana (family) that stewarded the land to produce all the necessities for living — food, shelter, tools and clothing. Other necessities, such as water, came from the land.
Provisions that could not be obtained within the ahupuaʻa were traded for with other ʻohana. Wealth was determined by the ability to be productive, make exchanges, or distribute goods.
When foreigners first came to Hawaiʻi, a new economic force came into play.
Opportunities to reinforce one’s power and prestige through amassing foreign goods were introduced. Weapons, in particular, provided the means to solidify power and authority.
Native Hawaiians traded for these foreign goods and slowly a new market system emerged in Hawaiʻi. The new labor system, codependent on the market system, became one based on the exchange of payment for labor.
Eventually, this new system became formalized through legislation passed in 1840 and 1841. By the late 1800s, the system of exchanging labor for pay was in full effect.
Differences in pay existed among the different ethnic groups employed.
At the start of the 1900s disparities in wages persisted in all industries and occupations. In particular, Hawaiian workers who worked the same jobs and hours as American workers were often paid less.
In rare cases, such as for the occupation of first mate, Hawaiian workers were paid more than the average American worker. A sample of occupational data shows that Hawaiian workers were paid anywhere between 50 cents to two dollars less per day than American workers (see Table 1).
Lower wages meant lower income for Native Hawaiian families. In 1910 a survey was conducted of family income and expenditures, which demonstrated the effect of lower paying jobs on families and expenses.
On average, Hawaiian families had lower total family incomes than Caucasian families despite the fact that children in Hawaiian families were more likely to work to supplement the family income. Thus, not only did Hawaiian families have less disposable income, they also had less “disposable time” to invest in other activities (e.g., education).
Today, Native Hawaiians continue to experience the same disadvantages as their kupuna (ancestors). High rates of unemployment, underrepresentation in high paying jobs, low family income, and lower earnings at all education levels continue to limit opportunities for many Native Hawaiian families.
The trend appears to be worsening when looking at the proportion of Native Hawaiian households that earn a livable income (Figure 1).
The decrease in the proportion of Native Hawaiian households with a livable income is explained by the rising cost of living in Hawaiʻi and decline in earnings.
Costs for rent, gas, and food all increased over the time period from 2002 to 2010. At the same time, wages declined.
In 2004 the average annual wage earned by employed Native Hawaiians 25 years and older was $40,683. This number decreased to $38,607 in 2010.
Adding together the costs of all basic necessities (rent, food, child care, transportation, health care, other necessities and taxes) and dividing by total household income yields the percentage of household income spent on basic necessities. A larger percentage indicates that a household has less disposable income.
In 2004, 68 percent of the average Native Hawaiian household’s income was spent on basic necessities. Six years later, this number grew to 80 percent. The amount is nearly equivalent with what Native Hawaiians spent on basic necessities 100 years ago.
Educational attainment may be one way to address the negative trends in livable income among Native Hawaiians. Various studies find that higher levels of education are linked to higher average incomes. Education may also increase resilience to adverse economic conditions.
Many analyses of the effect of the Great Recession demonstrated that those with the least education were most negatively impacted. Figure 2 shows the relationship between education and income among Native Hawaiians. This highlights the potential of education as a vehicle of economic mobility and security.
Higher levels of educational attainment among Native Hawaiians are linked to increased earnings and livable income rates.
KS Research Associate Justin Hong
Table 1. Occupation and wages in $US, 1900-1901. Click on tables to enlarge.
Table 2. Average annual income and expenditures in $US, 1910.
Figure 1. Trend in livable income among Native Hawaiian households.
Figure 2. Livable income among Native Hawaiian households by educational attainment.
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