Low pay, not just high prices, behind Hawaiʻi’s persistent population loss, UHERO research shows

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For 23 of the past 25 years, more residents have left Hawaiʻi than arrived from the continental U.S., according to an analysis released March 19 by the University of Hawaiʻi Economic Research Organization (UHERO). The research finds the answer is not because of high prices or low incomes, but a combination of both that puts the state in a rare and troubling category.

Hawaiʻi stands out nationally for having both high living costs and relatively modest incomes, a mix that researchers say drives persistent outmigration. While expensive continental U.S. cities often retain residents with higher wages, Hawaiʻi more closely resembles economically "left-behind" regions where limited opportunity pushes people to leave.

An analysis of migration patterns across states and 384 U.S. metro areas shows that higher prices tend to push residents out, while higher incomes attract them. In Hawaiʻi, both forces are working in the same direction, but while Hawaiʻi has always been expensive, the widening income gap with the rest of the nation is a growing and more troubling driver.

'Priced out and left behind'

"This combination places Hawaiʻi in one of the rarest and most concerning categories in the national data: simultaneously priced out and left behind," wrote UHERO authors Steven Bond-Smith and Erich Schwartz. "Residents are not leaving for a single reason. They are responding to a structure of economic pressures that makes staying difficult and makes opportunity elsewhere increasingly attractive."

In urban Honolulu, high costs account for a significant share of outmigration. Incomes, which have recently fallen below the national average, add growing pressure. On Maui, price and income effects are more evenly matched, with both contributing to residents leaving. In both cases, lagging incomes predict growing shares of outmigration, while the high cost of living predicts relatively constant shares. While Hawaiʻi Island and Kauaʻi were excluded from the city dataset, researchers believe similar forces are likely happening there too.

Researchers identified additional local factors in Honolulu-including geographic isolation, limited housing supply, congestion and a narrow industry base-that intensify migration pressures beyond what prices and incomes alone would predict.

When adjusting for cost of living, Hawaiʻi's income levels align more closely with struggling continental U.S. regions than with high-cost, high-wage cities such as San Francisco or Seattle.

This post focuses on a key theme from UHERO's comprehensive report, "Beyond the Price of Paradise: Is Hawaiʻi being left behind? " released on February 1. In that report, researchers say lowering the cost of living alone won't be enough, and that Hawaiʻi must boost long-term income and productivity growth to remain economically sustainable. They recommend policies that diversify the economy, support innovation and remove barriers to growth, alongside continued efforts to improve affordability.

UHERO is housed in UH Mānoa College of Social Sciences.