Honolulu ranks high in income growth
A local economist warns that inflation is starting to erode the increases
Personal incomes in Honolulu grew faster than the nation in 2004, according to a report released yesterday by the U.S. Commerce Department, but a local economist said incomes aren't likely to keep pace with future inflation.
According to a report by the department's Bureau of Economic Analysis, Honolulu's per-capita income rose 7.2 percent to $34,911 in 2004, the most recent year for which the agency's analysis is available.
Honolulu ranked 48th out of 361 metropolitan areas in per-capita income, up from 67th the year before. Per capita income is the annual total income of residents divided by a state's population.
Total personal income in Honolulu rose 8 percent in 2004 to $31.4 billion from $29.1 billion the previous year.
But while Honolulu ranked in the top 15 percent of all metropolitan areas for personal and per capita income growth, the ever-increasing costs of energy and housing made it difficult for some residents to feel richer.
"We saw that income in Hawaii grew very fast in 2004 and continues to grow, but the real story is that inflation is eating it up," said Paul Brewbaker, Bank of Hawaii senior vice president and chief economist.
Since 2004, Honolulu's robust economic conditions have led to inflation ranging from 3 percent to 4.5 percent to produce about a 3 percent increase in real income growth, he said.
"We don't have anything to be ashamed of in Hawaii, but there are other places that have obviously had a really dynamic time over the last decade and where the cost of living is a lot lower," Brewbaker said.
The bureau estimated the U.S. inflation rate for 2004 at 2.6 percent while per-capita personal income rose 5 percent nationally in 2004 to $33,050, up from $31,484 a year earlier. Per-capita income grew faster than inflation in Honolulu and most of the nation, with inflation outpacing growth in only 19 cities.
The Bridgeport-Stamford-Norwalk metropolitan area of Connecticut continued to have the highest per-capita income of all cities measured in 2004. The average income of $62,979 was nearly double the national average. Other high-performing areas included, several California cities, the District of Columbia area and the greater Boston area.
"What this list says is that there are a lot of great places to move to from Hawaii," Brewbaker said. Top performing cities generally included those with solid technology industries, he said. Oil producing centers also fared well.
Nine of the ten cities with the lowest per capita incomes in 2003 also had the lowest incomes in 2004. McAllen-Edinburg-Mission, Texas, was the last-place city. Its average income of $15,460 was less than half of the national average.