Income distribution and poverty alleviation for the native Hawaiian community

Abstract

Since 2000, Hawaii's economy has done relatively well over time and the State's per capita personal income is higher than the U.S. level. Hawaii's poverty rate is also lower than the mainland's. But in the midst of this prosperity, Native Hawaiians have substantially higher poverty rates. This study examines income distribution and its relation to poverty by using the Lorenz Curve, Gini Coefficient and Kuznets Ratio. First, our research reveals that poverty rates are higher and per capita income lower among Native Hawaiians although income distribution among Hawaiians has been about the same as it is for non-Hawaiian groups. An interesting finding is that income distribution at the household and family level is substantially better than at the individual level for Native Hawaiians. This may reflect the sense of family and community that Hawaiians call the Ohana spirit. An examination of the income component reveals that income and savings are very low among Native Hawaiians, making it difficult for them to borrow capital from private banks and start businesses. Possible factors for low income could be the ratio of Native Hawaiians graduating from business, science and technology majors are lower than other groups and Native Hawaiian run business' income as well as number of businesses is much lower than the State average. Finally, this study concludes by considering micro-finance concepts created by the Grameen Bank as one possible solution to allowing Native Hawaiians to participate more in business and increase income levels.