People are always talking about how expensive it is to live in Hawai‘i. We groan to friends about sky-high grocery bills, doctors’ invoices, the price of an interisland flight. After the irritation wears off — once we’ve muttered a few expletives — we carry on until a cashier hands us the next shocking receipt.

Before I continue, I need to come clean about something. I didn’t write the first sentence of this column. My grandparents, David and Cynthia Eyre did, 55 years ago in the pages of Honolulu Magazine, which they co-edited at the time.

My little act of plagiarism has a purpose. What the Eyres wanted to convey was that complaints about the cost of living in Hawaiʻi had, even then, existed for a very long time.

Ideas showcases stories, opinion and analysis about Hawaiʻi, from the state’s sharpest thinkers, to stretch our collective thinking about a problem or an issue. Email news@civilbeat.org to submit an idea or an essay.

Read More

Their case in point was a letter sent by the missionary Maria Patton Chamberlain to her father in 1834. In it, she grumbled about paying double for everything she purchased in Honolulu, including gingham, calico and French muslin.

And this was not the only Honolulu Magazine article from that period about soaring prices. My cursory look at issues between 1967 and 1971 surfaced stories about Honolulu’s rent crisis, soaring land prices and another column by my grandparents on the growing sight of four cars parked in two-car garages around Honolulu, a sign of multigenerational homes even a half-century ago.

If you didn’t already know it in your bones, let me tell you: Hawaiʻi has always been expensive. There is no golden age to look back to longingly.

And yet, until about 15, maybe 20 years ago, there seemed to be a pathway to a middle-class way of living. Perhaps it wasn’t as prosperous a life as people lived on the continent, but it was a secure, happy and rich one all the same. 

Throughout my adolescence it seemed that families like mine could still make Hawaiʻi work, provided they were willing to make certain sacrifices.

It was in that world that my parents, both teachers, raised their children. We owned a home, I attended a private school, we went on trips every few years.

Many of my friends’ parents — air traffic controllers, school administrators, restaurant owners, journalists — made a life in the same way. They moved to neighborhoods in Hawaiʻi Kai, Kaimukī and Kāneʻohe. They didn’t go on cruises or live in big houses, but they put their kids in good schools, club sports, violin lessons, college prep courses.

Those children of the 1990s, now treading anxiously toward middle age, are now looking at the realities of life in Hawaiʻi and asking, what the hell happened? Why don’t we get that same bargain?

The trouble is, while this framing might feel emotionally true, it likely doesn’t describe what really happened. What if that bargain, the understanding we believed to be true, was just a set of economic circumstances at the tail end of a prosperous era where income in Hawaiʻi was strong enough to offset costs? The evidence, I’m afraid, leans in this direction.

In February, the University of Hawaiʻi Economic Research Organization published a report called “Beyond the price of paradise: Is Hawai‘i being left behind?” The report, written by the UH economist Steven Bond-Smith, was picked up by several local news outlets, including Civil Beat. Yet I’m not sure it has sunk into our consciousness in the way it needs to.

I think it’s worth revisiting some of the major findings. Bond-Smith reminds us that, as my grandparents suggested, the cost of living in Honolulu has been consistently 15% to 25% higher than the U.S. average, for decades and even prior to 1990. 

Concerning tourism, he writes that over the last 35 years, we’ve seen explosive growth in visitor numbers. Yet tourist spending has remained essentially flat.

Perhaps most concerning is the data about income levels in Hawaiʻi, which from 1969 to 1990 were some of the highest in the nation. In 1970, for instance, they were about 30% higher than the national average. By 2024, though, they were almost 5% below it.

There’s a lot more, and I encourage you to read it yourself here, but it essentially boils down to this: starting in the early 1990s, Hawaiʻi’s economy began to experience a malaise.

Between 1990 and 2005, our growth rate averaged a measly 0.3%, more than six times slower than the U.S. as a whole. We now suffer from weak productivity and income growth, and limited opportunity. 

Perhaps most troubling of all is this: if you look at the situation in terms of purchasing power, Hawaiʻi is beginning to look frighteningly like economically distressed corners of America.

“When you adjust for prices,” Bond-Smith told me, “Hawaiʻi is sitting right alongside West Virginia and Mississippi.” The ominous title of his report starts to make sense.

We all have first-hand experience with the consequences of this reality. Perhaps we have a child in an understaffed school. Perhaps we can’t get an appointment with a specialist. We all know people who have called it quits and left for the continent.

In Bond-Smith’s report, we have a diagnosis, backed by data rather than anecdote or emotion. But now we need a destination. The question we must now ask is what sort of Hawaiʻi do we want to exist in 20 years? And crucially, what compromises are we willing to make to get there?

Bond-Smith doesn’t give a lot by way of solutions — that really wasn’t his aim. But he does point to some ideas, including figuring out how to increase the value of tourism and diversify our economy, all with the help of good policy and a tolerance for failure.

His report also suggests that Hawaiʻi’s regulatory framework might be a little too taut. Bond-Smith notes that regulatory constraints have limited diversification in our economy in the past and that we have one of the most regulated housing markets in the country.

Reading between the lines, I also sense something a little more pointed: that we’re all a bit too closed-minded to projects that might lead to growth — development being high on the list.

In some sense, that’s fair. Hawaiʻi has been the place of extractive development in the past. But it’s not a reason to reject it outright, especially if it can help ease some of our problems. 

Of course, economists are not policymakers. Nor, for that matter, are journalists. What we need instead is a broader discussion between government and society. To be frank, I think that starts with all of us being a bit more open to ideas that could make material improvements to the islands, even if that does mean measured, thoughtful development and the easing of certain regulatory restrictions. 

At the very least, we need to ask ourselves the real questions of what kind of housing, infrastructure, jobs and businesses do we need to pull ourselves out of this slump?

What I know for certain is this: I’d like to see a reality where grandparents aren’t forced to meet grandchildren on FaceTime, where if you want to live in Hawaiʻi but aren’t ultra-wealthy, it’s possible.

For now, our economy doesn’t allow for that. With Bond-Smith’s report, we have a clearer sense as to why. 

Now, the hard work of change must begin. Doing nothing carries big risks. As Bond-Smith writes in his report, if Hawaiʻi remains on its current trajectory, our economy will fall further behind the rest of the country.