Beyond Paradise Prices: UHERO Report Reveals Hawaii's Decades-Long Economic Stagnation
HONOLULU (KHON2) — The postcard image of Hawaii's economy belies a troubling reality. A comprehensive report released this week by the University of Hawaii Economic Research Organization (UHERO) moves beyond the well-documented affordability crisis to identify a more fundamental problem: decades of economic stagnation.
The study finds that while nominal incomes in Hawaii appear average, adjusting for the nation's highest cost of living reveals a severe and prolonged deficit. For more than thirty years, the state's real wages and productivity growth have consistently lagged behind the rest of the United States.
"The narrative has long been that Hawaii is just expensive," said Steven Bond-Smith, UHERO assistant professor and the report's lead author. "But the data shows a 'slow-moving crisis' of weak growth. When we account for prices, Hawaii's economic performance aligns with regions like Appalachia or the rural South—areas historically recognized as distressed."
Researchers warn that focusing solely on lowering costs is insufficient. Without parallel gains in income and productivity, residents will continue to feel the squeeze. This long-term stagnation threatens the state's ability to fund public services, support households, and maintain its quality of life.
"Affordability must remain a focus," Bond-Smith concluded, "but lifting Hawaii's long-run income trajectory is equally, if not more, critical for the future."
Community Voices:
David K., Small Business Owner (Kailua): "This confirms what we feel every day. My costs keep rising, but my customers' real spending power is shrinking. We need policies that attract diverse, high-value industries, not just more tourism."
Leilani M., Teacher (Waipahu): "It's heartbreaking. My family has been here for generations, but my salary doesn't stretch far. We talk about 'keeping Hawaii for Hawaiians,' but that's impossible if the economy doesn't work for us. This isn't just data; it's our lives."
Mark T., Retired Banker (Hawaii Kai): "Frankly, I'm furious. Thirty years of failure by consecutive administrations and legislatures. We've become complacent, relying on a mono-economy. This report is a failing grade for our leadership. Where's the vision and the bold action?"
Professor Elena Rodriguez, Economist (UH Mānoa, not affiliated with UHERO): "UHERO's analysis is crucial. It shifts the debate from symptom—high costs—to the core disease: low growth. Comparing Hawaii to distressed mainland regions after price adjustment is a powerful, sobering framing that should be a wake-up call for comprehensive policy reform."
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