Hawai‘i economic news is a mixed bag of good and bad

Recent news reports about Hawai‘i’s economy reveal an improving but still grim picture of conditions here. HANO has been tracking reports from Pacific Business News that demonstrate that while times are good, many parts of the local economic picture remain dark:

Good news: Hawai‘i exceeded the national rate of personal income growth, which accelerated in all regions of the U.S. during the third quarter of 2005. Nationally, personal incomes grew 1.4 percent, while in Hawai‘i growth was 1.5 percent, thanks largely to the hospitality industry and the military. According to the U.S. Bureau of Economic Analysis, Hawai‘i’s combined annual personal incomes topped $46.9 billion by the end of last summer.

Bad news: The U.S. Department of Labor reported in January that the national consumer price index rose 2.5 percent. If food and energy prices are left out, the index rose even faster, by 2.6 percent. Using a 1986 baseline of 100, the index is now 198 for the nation and for west coast cities it has now topped 200, reaching 205 in Los Angeles and 206 in San Francisco.

Good news: Honolulu had the lowest unemployment rate in the nation in December, according to the U.S. Bureau of Labor Statistics, with a jobless rate of 1.6 percent, down from 2.2 percent the month before. The Honolulu work force of 464,500 included only 10,400 out of work. The next closest U.S. cities were 1.8 percent in Logan, Utah and 2 percent in Provo, Utah, and Charlottesville, Va.

Bad news: Hawaii wages are an average of 10 percent below the national average. Workers here earn $704 a week on average, $80 less than the national average of $784, according to the U.S. Bureau of Labor Statistics in a report based on data from the second quarter of 2006. Hawai‘i’s wages were up 4 percent from the same time a year ago, but are eclipsed by New York, which led the country with average weekly wages of $1,453,  and Santa Clara, San Francisco and San Mateo counties in California all of which averaged above $1,200. Honolulu ranked 195th of 325 counties compared with average wages of $726, up 3.7 percent from a year earlier.

Worse news: One in five Hawai‘i families have zero or negative net financial worth, the 45th worst condition of the 50 states, according to a study released by the Hawaii Alliance for Community-Based Economic Development that was compiled by CFED, a Washington, D.C., nonprofit. Although the federal government spends $362 billion annually to help people build their financial assets, most of those initiatives benefit families that already are in excellent financial shape. HACBED is supporting legislation to adopt a state earned-income tax credit, eliminate asset limits on public assistance programs and support individual development accounts.