Hawaii Island’s Population Drop Signals An Ominous Economic Trend

The natural decline in population portends fewer young people working to support the elderly.

Economists in Hawaii expect that demographic trends in the state a decade from now will pass an ominous turn, and the number of people dying will be greater than the number being born.

But a retired university demographer who lives in Hilo found that the future is now, at least for the island of Hawaii.

Carl EschbachCarl Eschbach
For the first time, Hawaii Island is experiencing a natural population decline, with more residents dying in one year than are being born, says Karl Eschbach, a demographer in Hilo. The data shows that Oahu might see a similar trend if not for the military. (Stuart Yerton/Civil Strike/2024)

“Natural decline,” as demographers call it, is already happening on the Big Island, demographers say Carl Eschbachwho previously served as Demographics in Texas.

As shown below, Hawaii Department of Business, Economic Development and TourismThe state’s research division expects a natural decline statewide to begin around 2035.

Natural decline is not the same as population decline. In fact, Hawaii’s statewide population has been declining for years despite natural increase, with more people being born than dying. Natural increase has diluted Hawaii’s impact as more people leave the state than move here.

Natural statewide decline will amplify population losses in Hawaii.

The reason for the natural decline on the Big Island is that older adults and retirees are moving to the island, while younger adults are moving away and not returning, Eschbach said. Losing people in their prime working and reproductive years is a double whammy: People are leaving, and so are their young children. In addition, offspring that have not yet been conceived are born and raised elsewhere.

Carl Bonham, CEO of University of Hawaii Economic Research OrganizationHe says there is another factor at play regarding natural decline. The birth rate began to decline sharply after the Great Recession, and then the COVID-19 pandemic has signaled a recent increase in deaths.

“There has been this jump in deaths during the pandemic, and that should slow down,” he said.

Regardless, the loss of the working-age population is bad for a number of reasons. A decrease in the number of workers can lead to a decrease in the tax base, which is not replenished by retirees living on untaxed income. This means less revenue for social safety net programs, which may be in higher demand due to an aging population.

Eschbach, a former professor at the University of Texas Medical Branch at Galveston, said Oahu has not crossed the line into a normal decline yet. But that may just be because of the military, which has a double positive population on Oahu. Young military personnel come here with their spouses and children, reinforcing the younger population, as shown in the population graph below.

These images are called population pyramids because they are supposed to look like triangles with wide bases of young people and small tips of old people. Above, the photo on the left shows Oahu residents with and without military personnel and their families.

The population pyramid of the neighboring island looks like a column with a pointed top. Oahu has more younger adults, creating a bulge in the middle, and a wider base of younger kids.

Eschbach points out that this is largely due to the military presence on Oahu. Remove the army of Oahu’s population, and the shape of Oahu’s population pyramid would look similar to that of neighboring islands. However, removing the army from the neighboring island pyramid would result in little change.

“The military is essentially a source of internal migration of young people,” says Bonham.

The loss of the state’s tax base is just one result of a trend of losing younger adults, Bonham said. It also means a loss of labor force, which means a loss in economic activity. The only way to sustain economic growth is to develop a larger workforce or increase productivity, Bonham said.

Carl Bonham, executive director of the University of Hawaii’s Economic Research Organization, pointed to the importance of population to economic growth last week when discussing… Latest UHERO Economic Forecasts For Hawaii.

In theory, AI could fill gaps by boosting productivity in Hawaii’s tourism economy, Bonham said. Take robotic hotel and restaurant workers, for example. But he said the best solution for Hawaii, and the United States as a whole, is to make changes in immigration policy that make it easier for foreign workers to immigrate here.

It’s not just Hawaii’s economy that’s at risk. a Latest White House report He noted a trend of declining fertility rates nationally, and predicted that the country’s population would also begin to shrink by 2040 without increased net migration to the United States.

“This will very likely put pressure on politicians to fix the broken system,” Bonham said.

Hawaii’s changing economy“Supported by a grant from Hawaii Community Foundation As part of its Change Framework project.

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