Measuring Productivity in the Pacific: How Does Hawai‘i Compare?

Patricia Yu ()
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Patricia Yu: University of Hawai‘i - West Oʻahu, Economics

Chapter 2 in Economic Development in Hawai‘i, 2026, pp 17-47 from Springer

Abstract: Abstract This chapter critically examines the productivity paradox in Hawai‘i, where high living costs and a globally recognized quality of life mask deeper economic inefficiencies. Despite robust tourism revenues and low unemployment rates, the state consistently underperforms on key productivity metrics such as output per hour worked and GDP per capita. Drawing on data from the U.S. Bureau of Labor Statistics and Bureau of Economic Analysis, this chapter reveals how structural characteristics such as a tourism-reliant, service-based economy and high input costs distort the real picture of economic efficiency. It dissects productivity across sectors, from tourism and construction to health care and technology. While sectors like software development and architecture hold promise, they are limited by capital constraints and talent outmigration. Other sectors such as public service, education, and health care are indispensable but structurally capped in productivity due to funding models and labor intensity. This chapter also explores how Hawai‘i’s extreme cost of living, shipping expenses, energy rates, and housing prices undermine per-worker output. Finally, it considers human capital and innovation as long-term levers of productivity. By integrating Indigenous frameworks, localized education-to-career pipelines, and targeted policy reforms, Hawai‘i can redefine productivity not just in economic terms, but as a measure of shared well-being and regenerative capacity. It concludes with a call to shift away from growth metrics rooted in continental norms and toward island-specific indicators that reflect resilience, cultural continuity, and sustainability.

Keywords: Hawai‘i productivity; Labor efficiency; Cost of living; Tourism economy; Sectoral productivity; Wage stagnation; Innovation ecosystem; Human capital; Skilled labor shortage; Brain drain; Jones Act; Localized economy; Circular economy; Indigenous knowledge systems. (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-15689-1_2

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DOI: 10.1007/978-3-032-15689-1_2

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