HACBED report: Asset-building can be the path to social justice in Hawaii

Although many in Hawaii now enjoy a buoyant economy, a new study points out that not all citizens are. For example, the state's lowest-in-the-nation unemployment rate masks the fact that only 31 percent of jobs in Hawaii pay a living wage and a high percentage of the workforce work several part-time jobs because full-time work is unavailable.

Hawaii ranks 49th in the nation for home ownership, according to the Corporation for Enterprise Development. Since homeownership is the primary asset for most American families, this is disturbing.

Meanwhile, the cost of living in Honolulu is approximately $55,500 per year for a family of four, which puts a new perspective on the median household income of $58,000. At the same time, the state ranks fourth worst in the nation on the taxes it imposes on people who earn less than the poverty rate of $14,000 per year.

While CFED's annual report card on assets and opportunity gave Hawaii a an overall grade of B, its tax policy was ranked "substandard" and CFED suggest more work in the areas of asset protection, such as payday lending, and fostering health care and home ownership.

The Hawaii Alliance for Community-Based Economic Development released a new study on Tuesday, Dec. 5, that makes the case for coordinated asset-building to address these ills. The study, authored by Andrew Aoki of 3Point Consulting, makes the case that coordinated efforts to make work pay, teach asset-building, break down barriers to asset-building and to help people save, start and own businesses and buy homes can accomplish these goals:

1. Cultivate grerater self sufficiency for those now dependent on government, charities and others.
2. Spark overall economic development by increassing the number of full participants in the state economy.
3. Better achieve social goals with more civic engagement, creating family legacies, more investment in public goods such as education and environment and more people achieving the American Dream, where people get ahead through hard work and playing by the rules.

The study notes that while the federal government spent $362 billion in fiscal year 2005 in direct outlays and tax expenditure to subsidize asset-building, most of that was home mortgage tax deductions, deferred taxes on retirement plans and capital gains retention that benefited homeowners and those with high net worth, not those struggling to some day own a home.

The HACBED study proposes an asset-building movement involving the activities of nonprofits, foundations, businesses, government and others to coordinate activities, such as:

• Passing state and county legislation that supports asset-building
• Advocating for changes in policy and business practices to support asset-building
• Researching best practices in asset-building nationally
• Implementing asset-building pilot programs and activities
• Gathering and tracking data on key indicators
• Building a system to develop high-quality programs in financial education, entrepreneurism, homeownership counseling and other areas
• Raising public awareness of the importance of assets
• Demonstrating how asset-building can benefit the entire state economy

"Many milestones in Hawaii's economic history include the rise and fall of plantations, dismantling discriminatory labor practices, building a strong safety net for the poor, establishing substantial workwer benefits and developing a tourist industry," the report concludes. "A successful asset-building movement in Hawaii would be no less significant."