America’s dream was once lined with white picket fences.

Homes glowed with the flickering of first-generation televisions, but also with a world of possibility for the middle-class families inside. After World War II, parents worked hard, but they were usually getting ahead — and they generally felt like they were setting their children up for the future.

The implicit promise of the American dream, of course, predated Hawaii becoming the 50th state. And in that era, many island residents who earned mid-range incomes could enjoy a middle-class lifestyle, albeit with fewer creature comforts than on much of the mainland. Much of Hawaii’s burgeoning middle class enjoyed growing buying power, good prospects for a solid retirement and better prospects for the kids.

But for much of the middle class, those happy days are gone. Decades of hard work often fail to add up to anything close to the dream. In fact, Civil Beat discovered — by contrasting median family incomes on Oahu with basic life expenses for homeowners — it doesn’t add up to anything at all.

The Buying-Power Crisis

In much of the country, a family of four can still live some version of a middle-class existence on a collective salary of $78,403, after income taxes, which is the median family income in Honolulu. In some of those mainland locations, people with such an income can buy homes at one-fourth of the price of median homes in the islands, and then benefit from the rest of their money going much farther.


Homes like this one on Coyne Street once represented an attainable version of the middle-class dream.

Cory Lum/Civil Beat

The situation, of course, is very different in most desirable coastal cities. The old middle-class equation really breaks down in Hawaii and, particularly, on Oahu. Here, the cost of a mortgage on a median-priced home, child care, food, health care, monthly car-related costs, core utilities and property tax eat up all of the median after-tax family income. Yes, all of it.

The middle-class dream was never about life being easy. It was about working hard and being rewarded by an improving situation. And for decades after World War II, the majority of the middle class was rising. This affected life in many ways. If a college student had to take out loans for higher education, she or he could be confident that post-graduation salaries would make it possible to pay off such debt without too much difficulty.

The old middle-class equation really breaks down in Hawaii and, particularly, on Oahu.

The same went for taking out a loan on a home; the mortgage payment would, over time, consume an ever-smaller percentage of the family’s increasing income. Similarly, growing salaries helped people to pay off cars and, later, credit card bills, while also setting money aside for down payments and retirement.

But dreams of widespread and shared prosperity in Hawaii were always more tenuous than on the mainland. There has always been limited space between the mountains and the sea. Policy-makers have long put constraints on land development and sheltered certain trades from competition, which have long brought benefits — like union salaries and greater job security — but at a cost to many residents in the islands. The way space is and isn’t developed also helped make the limited amount of residential land into a vast receptacle of wealth in the islands. Beyond that, there have always been the costs of importing so much to a remote archipelago in the Pacific Ocean.

These diverse factors ultimately have a very practical impact on the lives of middle-class people on Oahu. Given that the island’s median family income, pre-tax, is $85,608, Civil Beat looked at how that amount of money stacks up against some key elements of the cost of living. It fails to cover even the basic costs for a two-income family with a pair of children.

Oahu Median Income vs. Basic Costs

So, either the middle class dream is a thing of the past, or a family income of $85,608 is far from being enough to support it in the islands.

While hardly surprising to families struggling to make ends meet on the island, breaking down the numbers helps to highlight a deep disconnect between traditional middle-class salaries and basics across the state. It is a clear indicator of a middle-class in crisis.

Even if such a family was gifted a sizable down payment, they would still not, in most cases, be able to make ends meet.

The old-school logic in which the middle class gradually saves up to start a family and then buys a home no longer holds true in many cases in the islands. A family on the median income in this scenario can’t afford to offer financial support to elderly relatives. Taking on debt or seeking financial help from loves ones would likely be required to pay for other core expenses, including student loans, car payments, homeowners insurance, education, after-school care, elder care, home repairs, telephone service, cable, Internet, medical co-pays and prescriptions.

Similarly, it is hard to see how such a family could ever save up to buy a home — barring an inheritance, a history of remarkable investment returns, a winning lottery ticket or some other transformational factor. And even if such a family was gifted a sizable down payment, they would still not, in many cases, be able to make ends meet.

Getting the numbers to work would mean the creative weeding out of costs from the monthly budget ledger. This can involve anything from taking on short- or long-term housemates — including family members, and perhaps their families — to relentlessly utilizing friends and relatives for basics like child care. In many cases, it also means going into debt.

Broken Middle-Class Math

Here is how the numbers pencil out in Honolulu.

A majority of residents in Hawaii, and in Honolulu, live in a home their family owns. Honolulu’s median monthly mortgage, according to U.S. Census data from 2013, was $2,362.

Parents who don’t depend on friends or family to care for their children, and who don’t enjoy substantial government assistance, tend to pay for child care — and they often pay a lot. The child care resource and referral agency PATCH calculates that decent child care costs $640 per child each month on Oahu. Parents with two kids can expect to spend $1,280 every month.

A family of four in Honolulu needs to spend $713 a month at the very minimum on food just for basic nutrition, according to a living-wage calculator from MIT. Given that the average individual spends $359 on food — many families might expect to pay a little more than double the minimum nutrition bill. The tally: $1,436 per month.

And if this is the economic pressure on the median family of four, the situation is tougher on people with more children, and on those who earn less.

Health insurance eats a substantial chunk of most families’ monthly incomes. Although Hawaii has some of the lowest health care costs in the country, the average family still spends $300.25 each month, not including co-pays and deductibles.

Car owners spend an average of $343 on their vehicle per month for gas, repairs and insurance, according to the living-wage calculator. The average family has two cars, so that is $686 per month. (This does not include car payments or the initial purchase cost of a vehicles.) 

The average resident of Oahu spends $314 on electricity, water and sewage bills every month.

Federal and state governments take a bite out of family incomes too. The average family in Honolulu pays an annual tax bill of $7,205.

Then there is the city and county property tax bill which, for homeowners of November’s median priced home of $719,000, costs $2,517 annually.

Those expenses, over the course of a year, use up every penny of the median family income, and then another $653.

So, even if a family saved some or all of the $15,360 on child care, that money — minus the $653 — would need to cover an array of expenses. These might include car loans or the cost of buying two vehicles outright, after-school care, private school, school loans, furniture, appliances, clothing and much more. (See the fine print in the accompanying infographic.)


Middle-income people in the U.S. have long aspired to own a home and the parcel of land beneath it. That dream is increasingly out of reach in places like Hawaii.

Cory Lum/Civil Beat

And if this is the economic pressure on the median family of four, the situation is tougher on people with more children, and on those who earn less. The 2014 U.S. Metro Economies report found that 52.5 percent of all households — not just families — in Honolulu gross less than $75,000 per year after taxes.

With such numbers in mind it is understandable why so many dilapidated middle-class homes on Oahu are surrounded by picket fences that are splintered and eaten by termites: Their residents likely have no money for upkeep. It is a sign they many people can’t really keep up with the costs of the American dream at all.

• Civil Beat intern Marina Riker contributed to this report.

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