Island exodus stunts state’s growth

Hawaii's population grows .04 percent, the Census reports

Hawaii's population rose at its slowest pace in seven years as nearly 10,000 residents left the islands in the year ending July 1, according to the U.S. Census Bureau.

Economists believe steep home prices and inflation caused the exodus.

Since July 2006 the state added 4,753 U.S. residents for a population of 1,283,388, a 0.4 percent increase. There were 19,265 births and 9,269 deaths, as well as 4,112 new residents from other countries. But 9,673 people moved away.

Bank of Hawaii chief economist Paul Brewbaker tied the state's weak growth to a slowing economy. Fast-growing states like Nevada and Arizona appeal to emerging businesses because of their locations and low start-up costs, he said.

"The pace of economic activity (here) has lost some of that energy, lost some of that pull on labor resources from other places," Brewbaker said. "It also suggests we have some longer-term structural impediments in Hawaii that other states don't."

State economist Eugene Tian said Hawaii's 2.5 percent unemployment rate should attract mainland residents but that low population growth could further tighten the labor market. He suggested the state boost investment in affordable housing.

Leroy Laney, a professor of economics and finance at Hawaii Pacific University, said Hawaii's sluggish population growth is in line with its softening economy and high living costs.

But he warned that builders might leave Hawaii if the state tries to "overreact" with cheaper housing.

"It's hard to subsidize people coming in here," he said.