Hawaii’s government is growing faster than the private sector, according to research from the Grassroot Institute of Hawaii.
Data from the U.S. Bureau of Economic Analysis show that Hawaii government gross domestic product (GDP) has grown by 48 percent in the past decade, while Hawaii private sector GDP has grown by only 42 percent.
According to Keli’i Akina, President and CEO of the Grassroot Institute of Hawaii, “In a good economy, the private sector should grow faster than the government. But in Hawaii, our economy is stuck in reverse, as government continues to grow faster than the private sector.”
Adjusted for inflation, Hawaii’s government has grown by an average of 4 percent per year since 2004, while Hawaii’s private sector has grown by an average of only 3 percent annually.
Since 1990, Hawaii general fund spending has increased by 72 percent, adjusted for inflation.
“Government spending relies on the growth of the private sector to remain sustainable,” Akina noted. “But now, government is growing faster than the private sector, and this trend is unsustainable in the long run.”
Akina continued, “Government employees make up only 15 percent of Hawaii’s total workforce, yet Hawaii taxpayers have contributed an enormous amount to pay for generous increases in government salaries and benefits. Many of the increases in government spending have gone toward larger pension and health benefits for retirees, which have been subsidized by citizens in the private sector who are already struggling to save for their own retirement.
“If Hawaii’s government is to remain sustainable in the long run, government leaders should strive to allow the private sector to grow faster than the government. This can be done if we work together to lower taxes, remove overly burdensome regulations and cut wasteful spending.”