HONOLULU (HawaiiNewsNow) – A February report by the University of Hawaii Economic Research Organization suggests that the state’s cost of living and lagging incomes are comparable to economically distressed areas, known as “left-behind” regions.
Authors Steven Bond-Smith and Eric Schwartz explained in an online post:
“Across the United States, a number of regions that once thrived have struggled to adapt as their economies have changed. These ‘left-behind places’ share a common pattern: a dominant industry stops growing, productivity stalls, and incomes stagnate. The local economy doesn’t necessarily collapse; it simply fails to keep pace as the rest of the country moves ahead, leaving residents with declining relative living standards and frustration with their economic situations.”
At first glance, they note, Hawaii does not fit the image of a left-behind region. It is desirable, expensive, and globally recognizable.
Yet economic data tells a more complicated story.
According to the report, Hawaii’s average income is around the U.S. average, but its higher cost of living erodes the earner’s purchasing power.
“Once cost-of-living differences are taken into account, Hawaiʻi’s economy looks more like that of struggling regions than of high-cost, high-income states,” the report said.
Price adjustments reveal a disturbing trend: nearly four decades of weaker real productivity growth and slow real income growth.
The report states, “Since 1990, Hawaiʻi’s real per capita growth rate has stagnated at a compound annual rate of just 0.6 to 0.7%.”
UHERO warns that the pattern can lead to slower wage growth, more people leaving Hawaii, and difficulty maintaining public services.
The report emphasizes that the longer growth remains weak, the harder it will be to reverse the effects.
View the full report below:
Copyright 2026 Hawaii News Now. All rights reserved.