Income climbs 2.5% in Hawai'i

By Sean Hao
Advertiser Staff Writer

Hawai'i residents' incomes rose 2.5 percent through the first six months of this year after adjusting for inflation, compared with the first half of 2003, providing more evidence that that the state's economy is growing at a healthy pace.

The income figures, which were released yesterday by the Bureau of Economic Analysis, are considered a broad measure of economic activity. Sectors seeing the strongest income growth were real estate, professional and technical services, healthcare, and accommodations and food services, the data showed.

"A lot of the strength here is in these areas of the economy, which indicates broad-based growth in the economy," said Byron Gangnes, a University of Hawai'i associate professor of economics. "The point is, we're still seeing substantially healthy real income growth."

Behind the economy's strength are a robust construction sector and a recovering tourism market. For many working in construction, the rise in income is accompanied by an increase in hours on the job.

"There's a lot of 10-hour days here," said Keali'i Flood, a carpenter foreman at the Ko'olani luxury condominium under construction in Kaka'ako. "So, yeah, our incomes are growing."

In addition, journeyman carpenters last month received a 40-cent-an-hour raise to $31.95, excluding other benefits.

As Hawai'i's economy continues to grow, concerns about inflation from the higher cost of homes and other goods and services have surfaced. During the first half of this year, the cost of living rose 3.3 percent statewide — the highest since 1992.

Before adjusting for inflation, salaries and wages rose 5.8 percent in the first six months of this year, better than the 5.2 percent increase for the nation as a whole.

For many in Hawai'i, the wage growth is more than offsetting inflation, Gangnes said. "The average person is seeing real incomes ... increase but that doesn't mean everybody is," he said.

For Mike Fase, another carpenter working at the Ko'olani site, inflation places more emphasis on shopping around for discounts or deals on essentials such as gasoline and groceries.

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.