Luke Evslin: Can We Grow Our Economy, Not Our Population?
Hawaii’s economy has been based on growth for a long time. Now that needs to change.
We all mourn for the Hawaii that we grew up with, while grieving for the future that our children are left with.
Yet, despite our crowded roads, crumbling infrastructure and dwindling natural resources, if you own a home and have a decent job, then you have benefited from growth in Hawaii.
Before World War II, half of Hawaii鈥檚 land was owned by 80 individuals or companies, and the very large remainder was owned by the territorial government. It was a concentration of power and ownership unprecedented in American history.
At the time, it was nearly impossible to buy land. Not only were plantation-era incomes too low, but the land was all tied up in agriculture and those in control had no incentive to start selling.
As described in 鈥淟and and Power in Hawaii:鈥 With unionization, the economic diversity offered by tourism, and the return of Nissei World War II veterans who used the GI Bill to earn a college education, the economic situation changed overnight. A middle class appeared and they wanted in on the American dream. They wanted their own homes.
Breaking Up The Landholdings
And so a young army of Democratic legislators was swept into office with vows of breaking up the large landholdings. But through the pragmatism of politics, they found it easier — and more lucrative — simply to tax the land into development.
A taxation policy of聽highest and best use not only ensured higher tax revenues, it led to the steady development of all lands not designated as agricultural. And the ensuing financial windfall has kept Hawaii鈥檚 political machine well oiled ever since.
If you鈥檙e paying resort-level taxes for a parcel of ocean front land that鈥檚 growing pineapples, then you find someone to build a resort on it. It doesn鈥檛 take much number crunching to realize that your residential zoned lots are worth more when they鈥檙e growing houses than when they鈥檙e growing sugar cane. And it takes even less mathematical foresight to realize that the same politicians who once vowed to break up the land now hold the keys to prosperity.
But the politicians, landowners and developers aren鈥檛 the only ones to have benefited — so have you. All of those cranes lifted up our economy along with our changing skyline. Home ownership聽聽since聽1960. Our average income, adjusted for inflation, has increased correspondingly by 62 percent.
But our relative prosperity comes with a steep cost. We鈥檝e traded in our open space for sprawling developments and our quiet rural streets for endless traffic.
Too Many People
After 30 years of booming growth, Gov. George Ariyoshi commented on this inherent trade-off when he said, in his state of the state address in 1977, that:
“Too many people means too few jobs and too much competition for them; too many people means too little land for agriculture and parks and scenic vistas; too many people means too much crime and too much erosion of possibly our single most important commodity, the Aloha Spirit; too many people means too much pressure on all our governmental and private institutions.
“In short, too many people can spell disaster for this state.
“Hawaii is a national treasure, but it is a very fragile treasure, one which can be easily destroyed by over-population and excessive demands on its resources.”
In order to make it more difficult to move to Hawaii, Governor Ariyoshi pushed for one-year residency requirements for all state and local jobs 鈥 which encompassed 12 percent of the workforce at the time.
But his bold idea was short lived.
As outlined in聽聽on growth management in Hawaii, 鈥渢he right to pursue happiness鈥 guaranteed by the State of Hawaii Constitution and the 鈥渞ight to travel鈥 guaranteed by the 14th聽Amendment of the U.S. Constitution ensure that Hawaii can not slow down population growth through residency requirements or restrictions. As long as we remain part of the United States, then any U.S. citizen has the聽inalienable聽right to move here.
And as much as we bemoan our crowded roads, our beaches lost to the throngs of tourists and the never-ending spiral of development, it may be the other end of the growth spectrum that poses the greatest threat.
The rapid population growth and availability of land that fueled our economic explosion from statehood is over. And it鈥檚 not coming back.
Slowing growth
As the planet moves from an agrarian society to an urban one, the easiest way to raise your family鈥檚 living standards is to have fewer聽children. Because of that, birthrates are falling in every developed community on the planet. Europe, Russia and some Asian countries are facing precipitous population declines. In most of the developed world birthrates are at or below the replacement rate. And even among the poorest countries on the planet the birthrate is expected to level out by the end of the century.
础蝉听, the population growth rate in Hawaii has been steadily declining from near 4 percent annually in the ’50s, to 2 percent in the ’70s, to slightly over 1 percent today. Correspondingly, our personal income growth rate between 1960 and 1975 was 3.2 percent a year, yet between 1969 and 2007 it was only 0.6 percent. As our population boom slows, so does our economic growth.
And we can no longer rely on the growth of tourism either. For example, the聽聽states that Kauai saw an average of 23,536 visitors per day in 2014鈥攜et聽because of a lack of adequate infrastructure聽it calls for limiting the total number of tourists on Kauai to 23,000-25,000.
We鈥檙e facing a future where neither tourism nor population will grow at the rate that we鈥檝e become accustomed to over the last 50 years.
All credit 鈥 home loans, car loans, business loans, credit cards, etc. 鈥 are made as a bet on a future where the economic pie is bigger than today. And the near certainty of population growth has kept everyone confident that economic growth is inevitable. For there will always be more customers next year.
But what happens when that growth ends?
A Different Future
Throughout human history, there are no examples of rising standards of living with declining populations.
by 0.8 percent per year, and聽聽to cut services and abandon built infrastructure. Even the global recession that we are all just crawling our way out of was caused from a decline in new U.S. home construction. Because we weren鈥檛 prepared for it, it set off a domino effect and unemployment went up to 10 percent.
Struggling economies do not invest in fighting climate change, environmental conservation, or policies of social justice. And you definitely can鈥檛 reduce inequality or move out of the economic strata of your birth without economic growth.
So we have a dual threat. On one side we have a housing crisis, inadequate infrastructure, over-stressed natural resources and a warming climate from too many people 鈥 and on the other, we have to face the grave economic threat of a future without population growth.
The paradox is that as much as perpetual growth has been part of the problem, it鈥檚 also been part of the solution. But now, for the first time, we need to figure out how to decouple economic growth both and .
This is the burden that my generation is faced with. And it鈥檚 not going to be easy.
