Economic Development of Hawaii
Economic Development of HawaiiHawaii, with an area of 28,313 sq. km (10,932 sq. mi.), is the
43rd largest state in the U.S.; 6.9% of the land is owned by the
federal government. It consists mainly of the Hawaiian Islands, eight
main islands and 124 islets, reefs, and shoals. The major islands in
order of size are Hawaii, Maui, Oahu, Kauai, Molokai, Lanai, Nihau,
and Kahoolawe. Population growth has increased by 80,000 persons over
the past five years. Demographics show a large number of Hispanic
origin: Asian Hispanics are the most populated with white Hispanic
and Asian non-Hispanic following. Hawaii's economy has been long
dominated by plantation agriculture and military spending. As
agriculture has declined in importance, the economy has diversified to
encompass a large tourist business and a growing manufacturing
industry.
Hawaii's economy has changed drastically since statehood. In
1958, defense, sugar, and pineapple were the primary economic
activities, accounting for 40% of Gross State Product (GSP). In
contrast, visitor-related expenditures stood at just over 4% of
Hawaii's GSP prior to statehood. Today the positions are reversed;
sugar and pineapple constitute about 1% of GSP, defense accounts for
just under 11%, while visitor-related spending comes close to 24% of
Hawaii's GSP.
The movement toward a service- and trade-based economy becomes
even more apparent when considering the distribution of Hawaii's jobs
across sectors. The share of the economy's jobs accounted for by
manufacturing and agriculture have declined steadily since 1959 and
each currently makes up less than 4% of total jobs in the economy. At
the same time, the shares of jobs in wholesale and retail trade and in
services have risen, standing at about 23% and 28%, respectively.
Since 1991, Hawaii's economy has suffered from rising rates of
unemployment. This stands in marked contrast to the period 1980 to
1993, when the state enjoyed very low unemployment rates relative to
the nation as a whole. But by 1994 the recession had raised Hawaii's
unemployment rate to the national average (6.1%) for the first time in
15 years. In 1995, the state's unemployment rate improved slightly in
the first eleven months of the year to 5.4 percent, a 0.6 percentage
point decline from the first eleven months of 1994. Despite the lower
unemployment rate, the total number of wage and salary jobs declined
by 0.6 percent during the first eleven months of 1995. This was due in
part to a fall in part-time jobs which are often held by persons who
also have primary jobs elsewhere in the economy. The number of
construction jobs declined by more than 7 percent in the same period.
Other industries--namely, manufacturing, agriculture, transportation,
communications/utilities, and finance, insurance, and real
estateexperienced declines in the number of jobs as well. Jobs in
retail trade and services, however, increased 2.2 percent and 0.5
percent, respectively, reflecting an increase in visitor spending
since 1994. Following a dismal first quarter...
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