Report on Income Distribution in Hawaii and Alignment with Sustainable Development Goals

Executive Summary: Progress Towards SDG 10

A recent analysis by the University of Hawaii Economic Research Organization (UHERO) indicates that the state of Hawaii exhibits a lower level of income inequality compared to the United States national average. This finding positions the state favorably in its progress towards achieving Sustainable Development Goal 10 (Reduced Inequalities). The state’s unique economic landscape results in a compressed income distribution, a phenomenon with direct implications for several other SDGs, including SDG 8 (Decent Work and Economic Growth) and SDG 1 (No Poverty).

Key Findings on Income Inequality (SDG 10)

The primary metric used in the analysis is the Gini coefficient, a standard measure for income distribution and a key indicator for monitoring progress on SDG 10. A coefficient of ‘0’ represents perfect equality, while ‘1’ represents perfect inequality.

• In 2023, Hawaii’s Gini coefficient was recorded at 0.42.
• This figure is substantially lower than the U.S. national average of 0.485.
• This trend of lower-than-average inequality has been consistent for over a decade, highlighting a structural feature of Hawaii’s economy that contributes to the goals of SDG 10.

Economic Drivers and Implications for SDG 8: Decent Work and Economic Growth

The state’s progress on reducing inequality is intrinsically linked to its economic structure and labor market dynamics, which directly relate to SDG 8 (Decent Work and Economic Growth). The analysis identifies a dual effect that compresses the wage scale.

Factors Influencing Wage Compression:

1. Elevated Low- to Mid-Range Wages:
   • Employers in Hawaii tend to offer higher compensation for low- and mid-wage positions compared to their mainland counterparts.
   • This is attributed to the state’s high cost of living and a higher rate of unionization, which promotes the principles of decent work outlined in SDG 8.
2. Depressed High-Range Wages:
   • The state possesses fewer high-paying, specialized industries (e.g., technology, finance, advanced business services) that are prevalent in other major U.S. metropolitan areas.
   • The allure of Hawaii’s climate and amenities incentivizes high-skilled professionals to accept lower salaries than they would command on the mainland. For example, mid-career professionals in fields like engineering and computer science earn approximately $20,000 less annually.
   • This limits the upper end of the income spectrum, creating a challenge for retaining high-skilled talent but contributing to a more equitable distribution of economic growth.

Broader Context: Cost of Living and Sustainable Communities (SDG 1 & SDG 11)

While the compressed income distribution is a positive indicator for SDG 10, it must be viewed within the context of Hawaii’s high cost of living, a significant challenge related to SDG 11 (Sustainable Cities and Communities). The higher wages at the lower end of the spectrum are a necessary response to these costs, helping to mitigate poverty and support progress on SDG 1 (No Poverty). However, the overall economic pressure affects the quality of life for all residents. The state’s economic model, therefore, presents a complex case study in balancing economic growth, social equity, and community sustainability.

Analysis of the Article in Relation to Sustainable Development Goals (SDGs)

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article primarily addresses two Sustainable Development Goals by focusing on income distribution, wage structures, and the state’s economic composition.

• SDG 10: Reduced Inequalities

  This is the most central SDG to the article. The entire analysis is framed around measuring and explaining income inequality in Hawaii. The article explicitly uses the Gini coefficient, a standard measure of inequality, to compare Hawaii’s situation to the national average. It details the factors that lead to a “compressed” income distribution, which is the core subject of SDG 10.

• SDG 8: Decent Work and Economic Growth

  The article connects to SDG 8 by discussing wage levels, employment types, and the structure of Hawaii’s economy. It mentions that the primary economic engine, tourism, provides “low- to mid-wage employment.” It also discusses how wages for both low- and high-income workers are determined, the role of unionization in securing higher pay, and the relative absence of certain high-paying industries, all of which are key components of achieving decent work and sustainable economic growth.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the issues discussed, several specific targets under SDG 10 and SDG 8 are relevant.

1. SDG 10: Reduced Inequalities

   • Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average.

     The article directly relates to this target by analyzing the factors that lead to “higher pay for low- to middle-income workers” in Hawaii compared to their mainland counterparts. This compression of the income distribution, where the lower end is lifted, is a key mechanism for achieving Target 10.1.

2. SDG 8: Decent Work and Economic Growth

   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation…

     The article highlights a challenge related to this target by noting that Hawaii has “fewer high-paying, specialized occupations” and that industries like “finance, tech, and advanced business services — are either small or largely absent.” This points to a lack of economic diversification away from the tourism sector, which is a central theme of Target 8.2.

   • Target 8.5: By 2030, achieve full and productive employment and decent work for all… and equal pay for work of equal value.

     The discussion on wages directly relates to this target. The article notes that “local employers typically pay more than their mainland counterparts for the same jobs” in low- to mid-wage sectors, partly due to “higher rates of unionization.” This speaks to the “decent work” aspect. Conversely, it also notes that “top-paying positions in Hawaii often offer lower compensation than similar roles on the mainland,” which touches upon the complexities of “equal pay for work of equal value” in different economic contexts.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

The article explicitly mentions one key indicator and implies others that can be used for measurement.

1. For SDG 10 (Reduced Inequalities):

   • Gini coefficient (Explicitly Mentioned)

     The article is built around this indicator. It is defined as “a standard gauge of income inequality.” The text provides specific data points: “In 2023, Hawaii’s Gini coefficient was 0.42, well below the national average of 0.485.” This is a direct, quantifiable measure of progress towards reducing inequality.

2. For SDG 8 (Decent Work and Economic Growth):

   • Wage differentials between local and national labor markets (Implied)

     The article implies this indicator by comparing Hawaiian wages to mainland wages. It states that mid-career professionals in certain fields earn “$20,000 less than their counterparts on the mainland,” while low-wage workers earn more. Tracking this differential would measure aspects of Target 8.5.

   • Rate of unionization (Implied)

     The article mentions “higher rates of unionization” as a reason for better pay in low- to mid-wage jobs. The unionization rate is a measurable indicator related to decent work conditions (Target 8.5).

   • Sectoral share of the economy (Implied)

     The article implies this indicator by stating that high-wage industries like “finance, tech, and advanced business services” are “small or largely absent.” Measuring the contribution of these sectors to the state’s GDP or employment would be an indicator for economic diversification under Target 8.2.

4. Summary Table of SDGs, Targets, and Indicators

Source: spectrumlocalnews.com