Hawaii’s population has declined and could affect the economy

For the first time since statehood in 1959, Hawaii’s population declined for two consecutive years with fewer births, more deaths and a greater number of residents moving to the mainland.

The trend is alarming because without enough people economic growth could be affected, said Eugene Tian, state economist with Department of Business, Economic Development and Tourism.

“That is something significant because with fewer people it helps a little bit in the housing shortage, but there will definitely be less spending consumption and that will reduce economic growth,” said Tian, adding that 70 percent of gross domestic product is due to consumer spending. “Because the U.S. economy in the last two years has been growing faster than in Hawaii, people are looking for more opportunities and a lower cost of living.”

Hawaii was one of only nine states with waning populations, the latest Census Bureau report released this week shows. The others were Alaska, New York, Connecticut, Illinois, Louisiana, Mississippi, Wyoming and West Virginia.

That comes with all sorts of implications, including a decreasing demand for housing, which could lead to a slowdown or drop in home prices, as well as a shrinking workforce in an already tight labor market. The unemployment rate in the islands has hovered around 2 percent for most of the past year.

The state population dropped by 3,712, or 10 people per day, from July 2017 to July 2018. There were 17,326 births, 12,660 deaths and 4,075 people migrating to the islands from foreign countries. However, 12,430 residents left Hawaii for the mainland during that same period.

“Hawaii traditionally does lose people from domestic migration, every year since 2010,” said Luke Rogers, chief of the population estimate branch at the U.S. Census Bureau. “Hawaii actually gained people by having more births than deaths. But the losses due to net domestic migration offset both combined. Hawaii’s population declined in the last year primarily because of domestic migration.”

While we do have more births than deaths, there were fewer births each year over the past decade. The number of births minus deaths was about 9,000 annually in 2008 and now is only 5,000.

“That means our natural increase — births minus death — is slowing down. That’s a change in social behavior. People don’t want to have more children like in the past because they want to enjoy life. Now fewer children or no children is normal,” Tian said. “The best birth control is to develop the economy, because it’s too expensive to have children when the economy is better. That’s true worldwide.”

Meanwhile the state is graying.

Those 65 and older accounted for 17.8 percent of the population in 2017, ranking Hawaii the seventh-oldest state in the nation.

The resident population fell to 1,420,491 in July from 1,424,203 in July 2017. Hawaii’s population dropped by about 3,900 people from July 2016 to July 2017.

Nationally, the U.S. recorded 2.81 million deaths in the past year and 3.86 million births. The U.S. population is growing slower than it has in more than 80 years, according to a report by The New York Times, which noted that immigrants could soon account for a higher share of population growth compared with the natural increase.