Price‑Adjusted Measures Show Hawaiʻi Left Behind Compared to U.S. Peers
UHERO found that after adjusting incomes for Hawaiʻi’s high local prices, real income per person has barely grown since the early 1990s and the state ranks near Alabama, West Virginia and Mississippi.
The University of Hawaiʻi Economic Research Organization published an analysis on Feb. 19 showing that when incomes and GDP are adjusted for Hawaiʻi’s high local prices, the state’s real income per person has barely grown since the early 1990s and now looks closer to slower‑growth states than to high‑income metros. The Feb. 19 analysis builds on UHERO’s Feb. 1 report “Beyond the Price of Paradise: Is Hawaiʻi Being Left Behind?” by Steven Bond‑Smith and Erich Schwartz.
UHERO used a price‑adjusted measure of GDP per capita and adjusted state average incomes for the local cost of living to reflect purchasing power when comparing Hawaiʻi with other states. The analysis compared Hawaiʻi to federal benchmarks used to define economic distress and produced qualitative rankings that place Hawaiʻi “near the bottom” of the country on price‑adjusted income measures.
The central finding is stark: 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.” UHERO’s cross‑state comparisons show Hawaiʻi’s relative position “drops sharply,” placing the state around the same level as Alabama, West Virginia, and Mississippi rather than with high‑income, high‑cost metro areas such as Seattle or Boston.
Steven Bond‑Smith, lead author on the UHERO work, framed the outcome in personal terms. “We’re losing hardworking Hawaii families and getting people who are coming here basically for the lifestyle,” Bond‑Smith said. He added that “the people that are working really hard, they’re the ones who find it toughest to live in Hawaii” and that “people are being priced out of paradise by the cost of living, but they already were.”
UHERO links the trend to structural weaknesses in Hawaiʻi’s economy. The report notes the state’s heavy reliance on tourism and that Hawaiʻi “simply lacks a major export industry to attract dollars from out‑of‑state.” Bond‑Smith recalled a longer pattern: beginning in the late 1980s the state’s compound annual growth rate slowed, producing wage stagnation and fewer labor opportunities, a dynamic UHERO likens to communities in Appalachia or a “decaying post‑coal Rust Belt town.”
Population trends add urgency. UHERO notes Hawaiʻi’s population peaked in 2018 and has declined nearly every year since, driven largely by residents relocating to the mainland, a pattern tied to the combination of high costs and relatively low wages.
UHERO cautions that lowering costs alone will not solve the problem. The analysis says even if affordability improves, slow income growth means residents would face the same pressures again unless productivity and wages rise. The Feb. 19 piece warns the state “risks continued population losses” and raises long‑term questions about who can afford to build a future in Hawaiʻi.
The publicly available excerpts do not include the specific price index, base year, or the full ranking table used for the price adjustments. To produce precise numeric ranks and trend tables, UHERO’s full Feb. 1 report and the Feb. 19 analysis with underlying data would be required. For now, UHERO’s synthesis by Bond‑Smith and Erich Schwartz places Hawaiʻi on a worrying trajectory: high costs combined with decades of weak income and productivity growth that, the authors say, increasingly resemble left‑behind regions of the mainland.
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