A big shout out to the YWCA Kaua’i for bringing to light the intersection of racial justice and economic disparity. I am a proud participant in the Stand Against Racism Challenge event and a strong advocate of the important work we all need to do to better ensure everyone has access to a fair economic playing field.
When the United States was climbing out of the Great Depression, President Roosevelt enacted the new Deal which included public works programs, welfare, social security. Due to the phenomenal level of unemployment across the country and the masses of people looking for work, employers were not compelled to pay fair wages, hence “sweat shops” popped up. To combat the unfair reduced wages, the President and Congress created by law a minimum wage of 25 cents per hour, however, racism tainted the final application of this law.
While President Roosevelt intended for the minimum wage to be applied to all economic sectors, Congress cut out the work areas that employed predominately Black workers such as farming and domestic service areas. It remains true today, that people of color make up the highest portion of workers in minimum wage jobs.
According to Labor statistics, the leisure and hospitality industry has the largest percentage of hourly wage workers. In Hawai’i, leisure and hospitality make up 21% of the economy. The Hawai’i minimum wage was last increased in 2018 and has been holding at $10.10/hr or $21,000 per year. The largest number of Hawaiian workers are employed in the accommodation and food services area. It’s important to understand that there is a difference between a minimum wage and a living wage. A living wage enables a person to support a family, engage in public life and maintain a reasonable standard of living. The living wage as calculated by MIT for Hawai’i State and Kaua’i County, for a single person without children is about $19/hr or $40,000 per year.
The minimum wage system is broken. Given the high cost of housing and food in Hawai’i, many hourly workers have packed it up and moved. On Kaua’i, there is a shortage of hourly workers and employers have had to raise wages to $15-$25 per hour to keep staffed in order to keep their business doors open. Yet, even these higher wages are barely enough, 40-60% of non-white households are struggling below the living wage. Not making a living wage has far reaching impact that perpetuates disparities in education opportunities, access to healthcare, etc.
Access to education as a path to increase earnings is hampered by lack of economic resources. Poorer neighborhoods have less access to the internet, laptops, transportation and childcare. The schools many have less revenue to pay teachers or provide supplies and materials to students. Students may be less able to compete for university entrances and financial aid. Put together, this creates a vicious cycle as many hourly workers may live and raise their families in lower income neighborhoods due to low pay.
I hope this information has inspired a better understanding of racial justice and economic disparity or inspired additional outreach in our community. There continues to be discussion at the State Legislature about raising the Hawai’i minimum wage, you can review House Bill 2510 for more information about what is being proposed.
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Marjorie Bennett is a partner at Chicago Partners, Hawai‘i, a wealth-management firm.
