Hawaii Economy

| Suggest an Edit

As the most isolated inhabited land mass in the world, Hawaii’s geographical location and limited natural resources present particular economic challenges. In the last 50 years, Hawaii has transitioned from an agricultural economy to one based on tourism, state and local government, and federal — especially military — spending. Hawaii’s economy measured by real GDP is projected to show a 1.8 percent increase in 2017, according to the state Department of Business, Economic Development and Tourism.

 Overview

Tourism is the state’s primary industry.

But a 2015 U.S. Census Bureau report found the federal government spent more than $20.09 billion in Hawaii during the calendar year.

By comparison, expenditures by visitors who came to Hawaii by air or by cruise ships in 201 totaled $16 billion.

Because of the state’s reliance on tourism, Hawaii’s economy is heavily dependent on both the greater U.S. economy and on the Japanese economy.

Hawaii’s tourism sector moved slightly up and  has been showing  an increase over expectations in 2017.  Visitor arrivals are now expected to increase 2.0 percent in 2017, 0.5 of a percentage point above the previous forecast. The forecast for visitor days in 2017 increased 0.8 of a percentage point to 2.2 percent. The forecast for visitor expenditure growth in 2017 was revised upward to 5.1 percent, from 2.9 percent growth projected in the previous forecast. For 2018, the growth rate of visitor arrivals, visitor days, and visitor expenditures are now expected to be 1.5 percent, 1.4 percent, and 1.9 percent, respectively.

Workforce

Hawaii has a total labor force of about  632, 120 according to the state Department of Labor and Industrial Relations. Monthly unemployment averages around 2.7 percent.

A high percentage of Hawaii’s work force is unionized, both in the public and private sector. Nationally, the union membership rate — the percent of wage and salary workers who were members of a union — was 12.3 percent. Hawaii — with a total of 123,000 union members — was one of four states last year with union membership rates over 20 percent, according to the U.S. Department of Labor.

Among Hawaii’s top private employers are Hilton Hotels, Hawaii Pacific Health, Starwood Hotels, Queen’s Health Systems, Kaiser, Wal-Mart, Hawaiian Airlines, Hawaiian Electric, Bank of Hawaii, Alexander & Baldwin, Foodland, First Hawaiian Bank and Kamehameha Schools.

Price of Paradise

Hawaii is a desirable — and expensive — place to live. The high cost of living in the state is known as the Price of Paradise. One of the reasons that it’s more expensive to live in Hawaii than in many places on the mainland is the cost of shipping goods to the islands and between the islands.

The cost of living index, which measures relative price levels for consumer goods and services, for Honolulu gives an indication of Hawaii costs. Honolulu’s index was 186 during the first half of 2016; the U.S. average is 100. The median sale price of a single-family home on Oahu in 2016 was 650,000, according to the Tax Resource website

While costs are high, the state’s per capita income is roughly $35,000. However, the state’s median household income for 2009 was $86,000.

Taxes contribute to the high cost of living in Hawaii. Although Hawaii has among the lowest property tax rates, it has a high income tax rate and a broad-based Hawaii General Excise and Use Tax of 4.5%. Hawaii taxpayers pay $4,399 per capita in state and local taxes. Hawaii’s 2009 state and local tax burden of 9.6 percent of income is slightly below the national average of 9.8 percent, according to the Tax Foundation.

Have feedback? Suggestions? Email Us!

Contents



                                        
Hawaii Economy
Hawaii Is A Paradise For Pay Phones Cory Lum/Civil Beat

Hawaii Is A Paradise For Pay Phones

For reasons that remain somewhat obscure, Hawaii has more pay phones per capita than any other state.
Why Does It Cost So Much To Build Stuff In Honolulu? PF Bentley/Civil Beat

Why Does It Cost So Much To Build Stuff In Honolulu?

It may look like gouging to some, but industry insiders say the real culprit is a stretched labor force.
NextEra Opponents Take Victory Lap, Ponder Hawaii’s Energy Future Cory Lum/Civil Beat

NextEra Opponents Take Victory Lap, Ponder Hawaii’s Energy Future

They want Hawaiian Electric Industries to work collaboratively with other stakeholders to figure out what comes next.
To Hear The Founding Fathers Tell It, Hemp Can Make America Great Again Chad Blair/Civil Beat

To Hear The Founding Fathers Tell It, Hemp Can Make America Great Again

States like Hawaii are loosening restrictions on industrial hemp, but the real breakthrough could come at the federal level.
Hawaii On The Hill: Keeping The Islands On Washington DC’s Map Cory Lum/Civil Beat

Hawaii On The Hill: Keeping The Islands On Washington DC’s Map

The third annual event sponsored by Sen. Mazie Hirono and Chamber of Commerce Hawaii shows off island businesses in the nation's capital.
Bill To Ban Hawaii’s Ivory Trade Heads To Full House Cory Lum/Civil Beat

Bill To Ban Hawaii’s Ivory Trade Heads To Full House

The measure received unanimous support in a House committee despite testimony that it would harm some local shopkeepers.
Living Hawaii: The Jones Act Pays Off — in Politics Cory Lum/Civil Beat

Living Hawaii: The Jones Act Pays Off — in Politics

The state’s delegation in Washington, D.C., enjoys outsized donations from maritime lobbyists, but several members told Civil Beat this doesn't affect their stances.
Living Hawaii: How Much Does Shipping Increase the Cost of Living? Cory Lum/Civl Beat

Living Hawaii: How Much Does Shipping Increase the Cost of Living?

Our reliance on goods that need to be shipped in increases prices in the islands. But by how much? The answer may surprise you.
Hawaii Takes a $100 Million-Plus Hit as Council Downgrades Revenue Forecast Nathan Eagle/Civil Beat

Hawaii Takes a $100 Million-Plus Hit as Council Downgrades Revenue Forecast

Panel foresees much lower growth than originally expected, meaning state government will have to get by on less.
Hawaii Economists Predict Record Number of Visitors David Fulmer via Flickr

Hawaii Economists Predict Record Number of Visitors

Quarterly state report optimistic despite effects of tropical storms.
More People Are Underemployed in Hawaii Than Are Jobless

More People Are Underemployed in Hawaii Than Are Jobless

New federal data counts Hawaii residents who want full-time jobs but can't find them.
Help Wanted: The Truth Behind Hawaii’s Low Unemployment Rate PF Bentley/Civil Beat

Help Wanted: The Truth Behind Hawaii’s Low Unemployment Rate

Joblessness in the state may be below the national average, but that doesn't mean the state has fully recovered.