economics | University of HawaiÊ»i System News /news News from the University of Hawaii Tue, 14 Apr 2026 23:02:48 +0000 en-US hourly 1 /news/wp-content/uploads/2019/04/cropped-ÌÇÐÄVlog¹Ù·½News512-1-32x32.jpg economics | University of HawaiÊ»i System News /news 32 32 28449828 Natural gas offers modest gains, big risks for Hawaiʻi energy costs: ÌÇÐÄVlog¹Ù·½ERO report /news/2026/04/14/liquefied-natural-gas/ Tue, 14 Apr 2026 22:58:23 +0000 /news/?p=232159 While LNG could offer short-term benefits under certain conditions, its long-term value is uncertain compared to continued investment in renewable energy and recent improvements to oil supply contracts.

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shot of a power plant

Switching Hawaiʻi’s power plants from oil to liquefied natural gas (LNG) may not deliver the dramatic drop in electricity prices that some proposals promise, according to a new analysis by the (ÌÇÐÄVlog¹Ù·½ERO), released April 14.

Hawaiʻi has the highest electricity rates in the nation, largely because it relies on imported oil. But a 2024 fuel contract renegotiation by Hawaiian Electric has already begun easing some of that burden by reducing how strongly global oil price spikes translate into local costs, saving tens of millions of dollars each month compared to the previous agreement.

The report finds that while natural gas is often far cheaper than oil on the continental U.S., Hawaiʻi faces higher costs because the fuel must be cooled, shipped across the ocean and converted back into gas. Those steps significantly narrow the price gap and expose the state to volatile global LNG markets, where prices can surge during supply disruptions.

At current prices, LNG still holds a modest cost advantage over oil. However, much of the projected savings comes not from the fuel itself but from newer, more efficient power plants that use less energy to generate electricity. Similar efficiency gains could be achieved without switching fuels.

Long-term investment concerns

The analysis also raises concerns about long-term investments in LNG infrastructure. Under scenarios where Hawaiʻi continues expanding renewable energy, such as solar paired with battery storage, LNG facilities could be underused while ratepayers remain responsible for their costs. Solar and battery systems are already competitive with fossil fuels and avoid the risks tied to global fuel markets.

The findings suggest that while LNG could offer short-term benefits under certain conditions, its long-term value is uncertain compared to continued investment in renewable energy and recent improvements to oil supply contracts.

“The upside is modest and front-loaded; the downside arrives when things go wrong—and in energy markets, they eventually do,” wrote ÌÇÐÄVlog¹Ù·½ERO Research Fellow and ÌÇÐÄVlog¹Ù·½ Mānoa Economics Professor Michael J. Roberts.

ÌÇÐÄVlog¹Ù·½ ÌÇÐÄVlog¹Ù·½ERO’s website for the and .

ÌÇÐÄVlog¹Ù·½ERO is housed in ÌÇÐÄVlog¹Ù·½ Mānoa’s .

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One condo, hundreds of homes: ÌÇÐÄVlog¹Ù·½ERO study reveals housing ripple effect /news/2026/03/23/housing-filtering-uhero/ Mon, 23 Mar 2026 18:23:58 +0000 /news/?p=231126 Housing filtering is a process in which new construction sets off a chain of moves that frees up existing homes across the market.

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condo skyline in Honolulu

A single new condominium tower in Honolulu may have opened up hundreds of additional housing opportunities across Oʻahu, according to new research from the (ÌÇÐÄVlog¹Ù·½ERO).

The study examines a concept known as housing filtering, a process in which new construction sets off a chain of moves that frees up existing homes across the market. When a household moves into a newly built unit, it leaves behind a previous home, creating an opportunity for another household, and so on.

500+ housing vacancies created

ÌÇÐÄVlog¹Ù·½ERO Associate Professor Justin Tyndall tracked this effect using The Central, a 512-unit mixed-income condo completed in 2021 near Ala Moana. He estimated the project generated more than 500 housing vacancies islandwide within three years, expanding availability far beyond the building itself.

“For policymakers and planners, the results highlight the importance of considering these broader market dynamics when evaluating housing policy,” Tyndall wrote. “Expanding housing supply in high-demand areas can improve affordability not only through income-restricted units, but also through the filtering process that returns older housing stock to the market.”

Greater affordability across the market

He added, “Policies that block market-rate housing construction, because new units are expensive, can be largely counterproductive. The production of all types of housing pushes up the overall supply of homes and can contribute to greater affordability across all segments of the market.”

The homes freed up through these chains were often more affordable and larger than the new units. On average, they were about 40% less expensive per square foot and more likely to include single-family homes with three or more bedrooms.

The study also found that market-rate units tended to produce more total vacancies, while income-restricted units more often opened up lower-cost housing options. Most of the movement remained local, with the majority of households relocating within Hawaiʻi.

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ÌÇÐÄVlog¹Ù·½ERO is housed in ÌÇÐÄVlog¹Ù·½ Mānoa’s .

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Low pay, not just high prices, behind Hawaiʻi’s persistent population loss /news/2026/03/19/high-prices-low-incomes/ Thu, 19 Mar 2026 21:16:53 +0000 /news/?p=230949 When adjusting for cost of living, Hawaiʻi's income levels align more closely with struggling continental U.S. regions than with high-cost, high-wage cities.

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condo skyline in Honolulu

For 23 of the past 25 years, more residents have left Hawaiʻi than arrived from the continental U.S., according to an . The research finds the answer is not because of high prices or low incomes, but a combination of both that puts the state in a rare and troubling category.

Hawaiʻi stands out nationally for having both high living costs and relatively modest incomes, a mix that researchers say drives persistent outmigration. While expensive continental U.S. cities often retain residents with higher wages, Hawaiʻi more closely resembles economically “left-behind” regions where limited opportunity pushes people to leave.

An analysis of migration patterns across states and 384 U.S. metro areas shows that higher prices tend to push residents out, while higher incomes attract them. In Hawaiʻi, both forces are working in the same direction, but while Hawaiʻi has always been expensive, the widening income gap with the rest of the nation is a growing and more troubling driver.

‘Priced out and left behind’

“This combination places Hawaiʻi in one of the rarest and most concerning categories in the national data: simultaneously priced out and left behind,” wrote ÌÇÐÄVlog¹Ù·½ERO authors Steven Bond-Smith and Erich Schwartz. “Residents are not leaving for a single reason. They are responding to a structure of economic pressures that makes staying difficult and makes opportunity elsewhere increasingly attractive.”

In urban Honolulu, high costs account for a significant share of outmigration. Incomes, which have recently fallen below the national average, add growing pressure. On Maui, price and income effects are more evenly matched, with both contributing to residents leaving. In both cases, lagging incomes predict growing shares of outmigration, while the high cost of living predicts relatively constant shares. While Hawaiʻi Island and Hawaiʻi were excluded from the city dataset, researchers believe similar forces are likely happening there too.

Researchers identified additional local factors in Honolulu—including geographic isolation, limited housing supply, congestion and a narrow industry base—that intensify migration pressures beyond what prices and incomes alone would predict.

When adjusting for cost of living, Hawaiʻi’s income levels align more closely with struggling continental U.S. regions than with high-cost, high-wage cities such as San Francisco or Seattle.

This post focuses on a key theme from ÌÇÐÄVlog¹Ù·½ERO’s comprehensive report, “Beyond the Price of Paradise: Is Hawaiʻi being left behind?” released on February 1. In that report, researchers say lowering the cost of living alone won’t be enough, and that Hawaiʻi must boost long-term income and productivity growth to remain economically sustainable. They recommend policies that diversify the economy, support innovation and remove barriers to growth, alongside continued efforts to improve affordability.

ÌÇÐÄVlog¹Ù·½ERO is housed in ÌÇÐÄVlog¹Ù·½ Mānoa .

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Career changers: ÌÇÐÄVlog¹Ù·½ trainings can boost earnings by up to $5,500 per quarter /news/2026/03/10/uh-trainings-can-boost-earnings/ Tue, 10 Mar 2026 21:00:39 +0000 /news/?p=230535 ÌÇÐÄVlog¹Ù·½ healthcare training may boost annual earnings by $22,000.

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Students training nursing techniques

A new report from the (ÌÇÐÄVlog¹Ù·½ERO) emphasizes the crucial role of the ÌÇÐÄVlog¹Ù·½ Community Colleges’ Good Jobs Hawaiʻi (GJH) program in successfully placing residents into high-demand, higher-paying careers. The preliminary analysis by Rachel Inafuku provides more evidence that these targeted training programs are helping families combat Hawaiʻi’s persistent, high cost of living.

“Consistent with the , average real quarterly wages for [Good Jobs Hawaiʻi] completers were more than $2,000 higher two quarters after program completion than two quarters prior,” the report said. This increase demonstrates how these short-term programs are creating essential earning power.

Higher healthcare earnings

nurse

The most dramatic gains were found among those who transitioned into a new field after training. In healthcare, the largest GJH pathway, participants who switched from non-healthcare industries—such as retail or food services—saw their average quarterly earnings rise by more than $5,500 two quarters after completion. This amounts to an annualized earnings increase of $22,000 for workers entering a sector with sustained high demand due to Hawaiʻi’s aging population.

Significant gains for skilled trades

person operating forklift

Similarly, skilled trades completers realized significant wage gains, earning roughly $2,600 more per quarter post-program. Employment patterns for this group also shifted away from lower-wage sectors and toward construction, manufacturing and public administration, aligning with the state’s thriving construction industry and its well-above-average wages.

Smaller increases for tech

Outcomes varied by sector. Technology students—many of whom were mid-career workers with pre-program earnings higher than the average GJH student—experienced smaller wage increases and more modest changes in industry placement.

Read more ÌÇÐÄVlog¹Ù·½ News Good Jobs Hawaiʻi stories

Overall, these findings highlight how post-training earnings trajectories reflect both the specific skills acquired and the broader structure of Hawaiʻi’s labor market.

Inafuku said, “As Hawaiʻi continues to face a high demand for workers in critical sectors alongside persistent cost-of-living pressures, workforce programs that align training with industry needs can address both challenges—placing workers in more stable, higher-paying jobs while helping employers meet demand.”

ÌÇÐÄVlog¹Ù·½ERO is housed in ÌÇÐÄVlog¹Ù·½ ²ÑÄå²Ô´Ç²¹â€™s .

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ÌÇÐÄVlog¹Ù·½ERO: Hawaiʻi’s ‘lost decade’ has become a ‘lost generation’ /news/2026/03/06/uhero-report-lost-generation/ Sat, 07 Mar 2026 00:09:11 +0000 /news/?p=230466 Economic stagnation, which began in the early 1990s, never truly ended in Hawaiʻi.

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Honolulu aerial

The gap between what Hawaiʻi residents can afford compared to elsewhere in the U.S. widens every year, not because of high prices, but because of lagging productivity and wage growth, according to a new analysis released March 5, by the University of Hawaiʻi Economic Research Organization (ÌÇÐÄVlog¹Ù·½ERO).

The state’s economic stagnation, which began in the early 1990s, has never truly ended for residents, according to the authors. Adjusting for Hawaiʻi’s substantially higher cost of living, while national metrics suggested a recovery in the 2000s, the state’s real per capita GDP has been on a permanently lower, underperforming trajectory.

by Steven Bond-Smith and Erich Schwartz, details how Hawaiʻi’s economic boom in the 1980s made it highly vulnerable to the collapse of Japan’s asset bubble. Despite an initial delay in the shock, the downturn exposed local weaknesses such as overreliance on tourism and slow economic diversification.

Slower growth, widening gap

Standard measures, which adjust for national inflation rates, indicate Hawaiʻi mostly kept pace with the U.S. economy and has only just fallen below the U.S. average in recent years. However, by accounting for local prices, the ÌÇÐÄVlog¹Ù·½ERO analysis tells a different story. When cost-of-living is factored in, the lost decade of the 1990s wasn’t quite as bad as it first appears, as prices grew more slowly in Hawaiʻi than in the U.S. overall, but the recovery is also muted as prices returned to their long-run relative level.

This results in an average real per capita growth rate since 2005 of a meager 0.7% per year, essentially matching the slow growth rate of the lost decade and its recovery from 1990 to 2005. As such, the lost decade never really ended in Hawaiʻi. This persistently slower growth rate has resulted in a gap with the mainland U.S. that has steadily widened. The primary driver of the widening gap appears to be that the state’s dominant tourism industry plateaued, and other sectors have not emerged to offset this slowdown.

Hawaiʻi’s ‘lost decade’ has become a lost generation,” the report states.

Economic underperformance, social consequences

This persistent underperformance reframes many of the state’s most pressing issues, including outmigration, housing stress and the difficulty for middle-class families to sustain a standard of living. The findings underscore a need for policies that address the long-term structural weaknesses in the state’s economy rather than focusing solely on the cost of living, which would only provide temporary relief from the widening gap between Hawaiʻi and the U.S. overall.

The analysis builds on a February 1, 2026 ÌÇÐÄVlog¹Ù·½ERO report, “Beyond the Price of Paradise: Is Hawaiʻi Being Left Behind?” also authored by Bond-Smith and Schwartz.

ÌÇÐÄVlog¹Ù·½ERO is housed in .

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Nearly $800K in new funding from HCF, Kaiser supports ÌÇÐÄVlog¹Ù·½â€™s Maui wildfire study /news/2026/03/01/mauiwes-hcf-kaiser-support/ Sun, 01 Mar 2026 18:00:22 +0000 /news/?p=230188 The funding will help sustain health screenings, follow-up visits and community outreach as researchers continue monitoring the physical and mental health effects of wildfire exposure.

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person doing a health test on a patient

Two new grants totaling nearly $800,000 will support the University of Hawaiʻi’s ongoing (MauiWES), a long-term effort tracking the health impacts of the 2023 Lahaina fires on Maui residents.

The Hawaiʻi Community Foundation has awarded $450,000 through its Maui Strong Fund, and Kaiser Permanente has committed $337,500 to the study. The funding will help sustain health screenings, follow-up visits and community outreach as researchers continue monitoring the physical and mental health effects of wildfire exposure.

“This support allows us to keep showing up for the Maui community over the long term,” said study co-lead Ruben Juarez, professor at the (ÌÇÐÄVlog¹Ù·½ERO). “The willingness of residents to participate and return for follow-up visits reflects a level of trust that is essential for understanding the full health impacts of the fires—and for responding in ways that truly help families over time.”

people sitting in a room for health testing
A Maui Wildfire Exposure Study event in 2024

The Hawaiʻi Community Foundation funding was awarded through the Maui Recovery Funders Collaborative, which was established in response to the Maui wildfires. The collaborative coordinates a variety of funders to streamline funding opportunities for community service providers and organizations.

“The Hawaiʻi Community Foundation, through its Maui Strong Fund, is a proud participant of the Maui Recovery Funders Collaborative, which has awarded over $9 million in funds to support organizations that are assisting those impacted by the fires,” said HCF CEO and President Terry George. “Efforts like the MauiWES not only help to provide continued health and mental health support to survivors but also help us to be better prepared and ultimately more resilient in the face of future disasters.”

“Kaiser Permanente’s commitment to funding the Maui Wildfire Exposure Study reflects the belief that strong, community‑focused research should guide long‑term recovery and future preparedness,” said David Tumilowicz, senior director of marketing and community health, Kaiser Permanente. “As climate‑driven wildfires become more frequent and destructive, we need clear, reliable health and environmental data to understand exposure risks, improve clinical care, and strengthen public health systems throughout the United States. MauiWES is providing essential insights that support Maui’s healing, while helping communities everywhere become more resilient in the face of future disasters.”

The grants arrive at an important moment for the project. In December 2025, MauiWES surpassed its 3,000th completed appointment. More than 2,000 participants have taken part since the study began, and more than 1,000 have already returned for follow-up visits, reflecting sustained engagement and growing trust within the community.

Launched after the deadly wildfires that destroyed large parts of Lahaina, MauiWES is a collaboration among ÌÇÐÄVlog¹Ù·½ERO, (JABSOM) and ÌÇÐÄVlog¹Ù·½ Maui College. The study provides free health screenings while generating data to better understand the long-term health consequences of wildfire smoke, environmental exposure and disaster-related stress.

Health challenges continue for residents

The study’s latest findings, published in August 2025 in JAMA Network Open, show that health challenges persist nearly two years after the fires. Many participants reported ongoing symptoms such as fatigue and breathing problems, alongside measurable differences in lung function indicators among those living closest to the burn zone. Mental health impacts also remain widespread, with a substantial share of participants screening positive for depressive symptoms and anxiety.

At the same time, researchers found that strong social support was linked to better mental well-being and fewer days of poor health, even among those with high wildfire exposure. While social connections supported mental health, they did not offset physical effects, highlighting the need for continued medical monitoring and care.

“These new grants come at a critical time,” said co-lead Alika Maunakea, professor in the Department of Anatomy, Biochemistry and Physiology at JABSOM. “They ensure we can continue monitoring both physical and mental health effects more than two years after the fires, while strengthening the community-based approach that our findings show is critical to recovery.”

Juarez and Maunakea recently returned from the first , held in commemoration of the first anniversary of the fires, where they presented findings from MauiWES to help inform the response to the Los Angeles fires. Teams from University of Southern California, University of California, Los Angeles, Stanford University and Harvard University are exploring similar cohort-based approaches informed by lessons from MauiWES for the Altadena, Eaton and Palisades fires.

See more ÌÇÐÄVlog¹Ù·½ News stories on MauiWES.

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ÌÇÐÄVlog¹Ù·½ERO: Hawaiʻi moves beyond recession, growth to remain modest /news/2026/02/27/uhero-first-quarter-forecast-2026/ Fri, 27 Feb 2026 13:50:19 +0000 /news/?p=230095 Overall, ÌÇÐÄVlog¹Ù·½ERO expects Hawaiʻi’s economy to expand at a modest rate over the next several years.

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people on a beach
Tourism has stabilized but is not yet expanding, according to ÌÇÐÄVlog¹Ù·½ERO‘s first quarter forecast for 2026. (Photo credit: Sung Shin/Unsplash)

Hawaiʻi’s economy is moving beyond last year’s mild recession, but the recovery will be gradual, according to the ’s (ÌÇÐÄVlog¹Ù·½ERO) first quarter forecast for 2026 released on February 27. After job losses tied to a tourism downturn and federal job cuts, payrolls have begun to edge upward.

A resilient U.S. economy and continued strength in construction are providing support, even as international visitor markets languish. Tepid job and income growth will become the new normal, because of anemic population trends and structural underperformance (relatively low long-run growth trend).

Major takeaways of the February 27 report:

  • The U.S. economy has held up better than expected, with solid consumer spending, investments in artificial intelligence and improving productivity. Economic gains slowed in the fourth quarter of 2025, partly because of the federal government shutdown. ÌÇÐÄVlog¹Ù·½ERO expects growth to remain near 2% this year before slowing somewhat in 2027. It is too soon to know the effects of the recent Supreme Court decision invalidating the administration’s broad tariffs. Globally, conditions have improved modestly, but continued trade tensions and policy uncertainty present ongoing risks.
  • Tourism has stabilized but is not yet expanding. In 2025, the average daily visitor census dropped 1.3%. The Japanese recovery has resumed at a moderate pace, but arrivals from other international markets have fallen sharply, reflecting adverse reaction to U.S. federal policy. Domestic visitors have helped offset these losses, and spending rose last year even as visitor numbers declined. Arrivals will stabilize this year, but a more substantial recovery in visitor headcounts is not expected until 2027.
  • The local labor market has improved modestly after contracting in the first half of 2025. ÌÇÐÄVlog¹Ù·½ERO now expects a small net increase in payroll jobs this year. Construction, health care and the accommodations and food service sectors will continue to add jobs, while federal civilian employment losses will pull down growth numbers. The unemployment rate will remain near its current low 2.2% level.
  • Inflation in Honolulu is expected to peak just above 3% in the second half of this year, although persistent U.S. inflation and the recent Supreme Court ruling on tariffs introduce considerable uncertainty. Local inflation will then ease to a 2.5% trend. Mortgage rates will remain near 6%, weighing on housing affordability even as construction activity overall remains elevated.

Overall, ÌÇÐÄVlog¹Ù·½ERO expects Hawaiʻi’s economy to expand at a modest rate over the next several years.

“Real income will grow by about 1% annually,” ÌÇÐÄVlog¹Ù·½ERO wrote. “Real GDP will expand by 1.6% this year before converging to a similarly slow long-run growth path. Forecast risks remain significant, including trade policy uncertainty, potential additional federal workforce reductions and ongoing weakness in international tourism. While the adoption of artificial intelligence holds promise, Hawaiʻi’s road ahead still looks to be one with slower growth than we have seen in the past.”

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ÌÇÐÄVlog¹Ù·½ERO is housed in ÌÇÐÄVlog¹Ù·½ Mānoa’s .

See the latest episode of ÌÇÐÄVlog¹Ù·½ERO Focus.

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Hawaiʻi’s economy resembles ‘left-behind’ regions in ÌÇÐÄVlog¹Ù·½ERO analysis /news/2026/02/19/economy-left-behind-region/ Thu, 19 Feb 2026 22:56:28 +0000 /news/?p=229706 “Left-behind” regions are areas where slow growth and limited opportunity leave incomes and productivity lagging behind the national average.

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land and blue sky

Hawaiʻi may increasingly resemble economically distressed “left-behind” regions—not because of rising prices, but because incomes and productivity have lagged for decades, according to a new analysis released February 19, by the (ÌÇÐÄVlog¹Ù·½ERO). “Left-behind” regions are areas where slow growth and limited opportunity leave incomes and productivity lagging behind the national average, often affecting residents’ economic mobility and overall opportunity.

The analysis builds on a February 1 ÌÇÐÄVlog¹Ù·½ERO report, “Beyond the Price of Paradise: Is Hawaiʻi Being Left Behind?” Also authored by Steven Bond-Smith and Erich Schwartz, it highlights new comparisons showing how the state ranks when income is adjusted for cost of living.

Using a price-adjusted measure of GDP per capita, the researchers found that once purchasing power is considered, Hawaiʻi’s real income per person has barely grown since the early 1990s and has steadily diverged from the national average. The February 19 analysis also compares Hawaiʻi to federal benchmarks used to define economic distress. When incomes are adjusted for local prices and compared across states, Hawaiʻi’s relative position drops sharply—placing it closer to slower-growth states than to high-income, high-cost metro areas such as Seattle or Boston.

Tourism, the state’s dominant industry, boomed in the decades after statehood but has largely plateaued since the late 1980s. Without sustained expansion in its economic backbone, broader growth has remained weak. The authors argue that Hawaiʻi’s high cost of living may mask deeper structural problems.

“What distinguishes Hawaiʻi is not only that it is expensive,” the researchers wrote. “It is that incomes and productivity have not kept up, and this has persisted for decades.”

The findings reinforce conclusions from the February 1 report that the state’s challenges stem less from rising prices than from long-term stagnation in productivity and per capita growth. The researchers warn that without diversification beyond tourism and stronger productivity gains, Hawaiʻi risks continued economic stagnation and outmigration.

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ÌÇÐÄVlog¹Ù·½ERO is housed in .

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Adjusted for local prices, Hawaiʻi’s economy among worst in nation, ÌÇÐÄVlog¹Ù·½ERO finds /news/2026/02/01/hawaii-economy-among-worst-in-nation/ Sun, 01 Feb 2026 18:00:32 +0000 /news/?p=228862 The report documents how Hawaiʻi's per-person GDP, income and productivity growth have stagnated since the early 1990s.

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condo skyline in Honolulu

Hawaiʻi residents earn about average incomes for the U.S.—but that money doesn’t go nearly as far as it does in other parts of the country. After adjusting for the state’s sky-high cost of living, a new report from the (ÌÇÐÄVlog¹Ù·½ERO) shows that Hawaiʻi’s wages and productivity have lagged the rest of the country for more than three decades, placing the state among the most economically distressed in the U.S.

The report, “Beyond the price of paradise: Is Hawaiʻi being left behind?,” released on February 1, documents how Hawaiʻi’s per-person GDP, income and productivity growth have stagnated since the early 1990s. On paper, Hawaiʻi’s economy appears to perform roughly on par with the U.S. average. As a result, when residents feel economic distress, the blame is often placed almost entirely on the high cost of living.

However, once incomes are adjusted for local prices (the actual price of goods and services in Hawaiʻi), Hawaiʻi’s long-run trajectory also looks far weaker than previously understood. The report concludes that addressing the underlying weakness in the state’s economic path is at least as important—and perhaps more important—than addressing the cost of living itself.

Hawaiʻi’s tourism economy is regularly hit by short-term crises. But our analysis shows the state has also been facing a slow-moving crisis for more than 30 years,” said lead author and ÌÇÐÄVlog¹Ù·½ERO Assistant Professor Steven Bond-Smith. “Once we account for Hawaiʻi’s high prices, the state looks increasingly similar to regions on the U.S. continent widely recognized as economically distressed, such as parts of Appalachia, the rural South and the Mississippi Delta where the lower cost of living cushions their lower earnings. But this type of economic distress is not just about the cost of living—it reflects decades of weak income and productivity growth.”

Key findings include:

  • Real income growth in Hawaiʻi has lagged the U.S. for more than three decades. When adjusted for local prices, Hawaiʻi’s per-person GDP has grown on average at less than half the national rate since the early 1990s.
  • The way residents experience Hawaiʻi’s economy more closely resembles economically distressed states than high-income coastal regions. Using price-adjusted incomes, Hawaiʻi ranks among the weakest-performing states in the country.
  • Persistently low income growth threatens long-term economic sustainability. As Hawaiʻi’s wages fall further behind the national average, it becomes increasingly difficult to fund public services, support local households and maintain the state’s quality of life.
  • Fixing the cost of living alone will not solve the problem. Even if affordability improved, weak real income growth means the same pressures would return within a few years unless Hawaiʻi’s productivity and income trajectory strengthen.

The ÌÇÐÄVlog¹Ù·½ERO report contends that Hawaiʻi’s long-term stagnation warrants the same kind of attention often called for in distressed continental U.S. states, alongside the focus on the cost of living. Affordability remains essential, but the authors conclude that lifting Hawaiʻi’s long-run income and productivity trajectory is equally, if not more critical for the state’s future. ÌÇÐÄVlog¹Ù·½ERO writes that revitalizing growth will require deliberate, well-designed policies that identify and remove barriers to diversification and innovation, supported by strong governance that emphasizes continuous monitoring, accountability and adaptation.

The full report is available on the .

ÌÇÐÄVlog¹Ù·½ERO is housed in ÌÇÐÄVlog¹Ù·½ ²Ñā²Ô´Ç²¹â€™s .

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AI is changing how we work, not the value of a college education /news/2026/01/22/uhero-value-college-ai/ Fri, 23 Jan 2026 02:37:07 +0000 /news/?p=228579 The research indicates that AI is more likely to change how work is performed rather than replace workers outright.

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As artificial intelligence (AI) rapidly reshapes the workplace, new research from University of Hawaiʻi at Mānoa economists finds that a college education continues to provide significant labor market advantages, including higher wages and greater adaptability, even as AI adoption accelerates.

The new blog by Steven Bond-Smith and Rachel Inafuku of the (ÌÇÐÄVlog¹Ù·½ERO) shows that jobs most exposed to AI are typically higher-paying, knowledge-intensive roles that are more likely to require a bachelor’s degree. In Hawaiʻi, occupations with the highest levels of AI exposure have median annual wages exceeding $80,000, compared with less than $60,000 for jobs with the lowest exposure.

AI is transforming the nature of work in uneven ways—raising productivity and skill demands in some sectors while leaving others heavily reliant on human labor—but not the relevance of higher education,” according to the ÌÇÐÄVlog¹Ù·½ERO blog. “Postsecondary education still opens doors to higher-paying, more adaptable careers, and that pattern holds in Hawaiʻi as it does nationally.”

Contrary to concerns that AI will eliminate jobs that typically require a college degree, the research indicates that AI is more likely to change how work is performed rather than replace workers outright. AI tends to automate routine, standardized tasks while complementing roles that rely on judgment, problem-solving and decision-making—skills more common in college-educated occupations. As a result, AI adoption often increases productivity and can raise demand for workers who can effectively use these technologies.

In Hawaiʻi, approximately 39,000 workers, or about 7% of total employment, are in occupations within the more lucrative top 10% of AI exposure, a smaller share than the national average of 11%. The difference reflects the state’s industry mix, which includes a larger share of tourism and service-sector jobs that tend to have lower AI exposure. A separate U.S. Treasury analysis similarly ranks Hawaiʻi 32nd among states for AI exposure.

Productivity gains, stable employment

While overall employment effects from AI remain uncertain, research to date suggests limited net job losses. Studies show that productivity gains at AI-adopting firms often offset reductions in routine-task employment, leading to stable employment levels even as job tasks evolve.

At the same time, demand for AI-related skills is rising rapidly. Job postings listing AI skills have increased sharply nationwide and in Hawaiʻi, particularly in professional, scientific and technical fields. This trend aligns with broader projections that education beyond high school will be required for roughly 70% of jobs in Hawaiʻi by 2031.

“As technology continues to evolve, investing in higher education remains a reliable way to ensure workers can evolve with it,” according to the blog. “The challenge ahead is not whether education matters, but how institutions, employers and policymakers can align programs to prepare workers for the labor market in the AI era.”

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ÌÇÐÄVlog¹Ù·½ERO is housed in ÌÇÐÄVlog¹Ù·½ ²Ñā²Ô´Ç²¹â€™s .

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