A project of the Partnership for a New American Economy
Hawaii has historically been a major destination for Asian immigrants. Hawaii is ethnically distinct from the rest of the US in that it has the highest percentage of Asian Americans and lowest percentage of White Americans of any state. Although recent immigration has slowed, 18 percent of the population is foreign-born. These immigrants come mostly from the Philippines, China and Japan.
Size of foreign-born population (2013)
Percent of state’s population that is immigrant
Growth in foreign-born population (2000-2013)
Top countries of origin
In addition to providing valuable support to Hawaii’s workforce, immigrants, specifically Hispanics, are also contributing to Hawaii's economy. A recent study by the Partnership for a New American Economy found that Hispanics account for $1.9 billion in Hawaii's spending power. While this number could be much higher if Hawaii reversed its restrictive immigration laws, Hispanics also contributed $727 million in combined federal, state, and local taxes. A total of $234 million of those taxes went to Social Security and $76 million was paid to the Medicare trust fund.
Immigrant students in Hawaii also contribute to critical Science, Technology, Engineering, and Math (or STEM) fields. Between 2008 and 2018, STEM industries are projected to play a key role in US economic growth, adding jobs 73 percent faster than the rest of the economy. For Hawaii, fixing the US immigration system to make it easier for students trained in America to remain in the country after graduation will be critical. In 2013, more than one in four of the students earning Master’s or PhDs in STEM from the state’s research-intensive universities were foreign-born. More than 74 percent of the students earning engineering PhDs in the state in recent years were also noncitizens. By 2020, Hawaii will need to fill 22,750 new STEM jobs and immigrants will play a key role in occupying these positions and continuing to promote economic growth.
Share of STEM graduates at state's most research-intensive schools who are foreign-born (2013)
Share of Engineering PhDs who were temporary or permanent residents (2006-2010)
Foreign-born STEM students and graduates in Hawaii are also driving economic growth that creates jobs for American workers. A recent study by the Partnership for a New American Economy and the American Enterprise Institute found that for every 100 foreign-born graduates of a US Master’s or PhD program who stays in the United States working in a STEM field, 262 jobs are created for Americans. That translates into a large employment boost for Hawaii, a state where, in 2010, more than one out of every four STEM workers with an advanced degree was a foreigner.
Immigration Reform = Economic Growth in Hawai’i
Reforming our immigration system will generate millions of dollars and thousands of jobs across Hawai’i. According to Regional Economic Models, Inc. (REMI), undocumented immigrants who enroll in a legal path to citizenship will generate more than 1,000 jobs and more than $83 million for the state by 2020. Expanding the number of both high-skilled (H-1B) visas will also have positive economic effects. REMI estimates that expansion of the H-1B program would result in more than 350 jobs and add more than $27 million to Gross State Product by 2014. The new H-1B visas awarded to Hawaii between 2010 and 2013 will translate into 840 new jobs for U.S.-born workers in the state by 2020.
In Hawaii, creating a path to citizenship and expanding the high-skilled visa program would add a total of more than $41 million to Gross State Product in 2014.
Immigrants have been integral in helping Hawaii grow economically in recent years, especially as the state has struggled, along with the rest of the economy, to drive new business and create American jobs. In Hawaii, as in many other places around the country, immigrants have punched above their weight class as entrepreneurs: in 2010, more than 23 percent of business owners in Hawaii were immigrants, despite immigrants making up less than 18 percent of the state’s total population. From 2006 to 2010, immigrant-owned businesses also generated more than $771 million in annual income for the state each year.
Share of business owners in Hawaii who are immigrants
Annual business income generated by immigrant-owned businesses
Immigrant entrepreneurs have long been a critical part of the Hawaii economy. Maurice J. “Sully” Sullivan, an Irish immigrant founded the state’s largest supermarket chain, Foodland. Today Foodland is still family-owned, employing more than 2,000 people and bringing in more than $190 million in revenue each year.
Current immigration policy has been harmful to Hawaii’s economy. From 2000 to 2010, a period when a flood of tourists from Brazil, China, and India boosted international travel spending globally, Hawaii saw its market share of the international tourism market decline. It is estimated that this drop cost the state more than 200,000 potential visitors, as well as about $850 million in spending and more than 6,000 jobs. Industry experts have blamed the lengthy delays and expenses involved in obtaining a US tourist visa as a major source of the declines over this period. This is especially pertinent to Hawaii, where tourism is vital to the state’s economy as the state’s largest source of outside income.
Although Hawaii’s isolated location makes it harder to efficiently export products, the agricultural industry has been important to the state since the beginning of its history. Today Hawaii’s nearly 8,000 farms are best known for macadamia nuts, pineapples, and coffee. Hawaii farm workers contribute richly to the American economy: the US Department of Agriculture estimates that nationally each on-farm job supports more than three additional jobs, often in better-paying industries like manufacturing, packaging, and transportation. Despite that, however, the US currently lacks a temporary visa for farm workers that is easy—and financially feasible—for many small and medium-sized farms to acquire. Between 1990 and 2010, Hawaii's supply of less-skilled workers born in the U.S. dropped by 23,024. Over that same period, the state's foreign-born, less-skilled labor force grew by 18,862, leaving a difference of 4,162 openings that immigrants could be filling.
Hawaii may also need to recruit immigrants in order to address a coming shortage of medical professionals. A report from the John A. Burns School of Medicine found that Hawaii is currently short 600 doctors, but by 2020 that shortage will more than double to 1,600. By 2030, research estimates Hawaii will have a shortage of 6,617 registered nurses. Although Hawaii ranks 8th in density of physicians in the country, they are concentrated in the urban areas of the state, leaving the rural counties with poor access to healthcare. Immigrants are already playing a major role filling these labor gaps: in 2012, 13.1 percent of physicians in the state were graduates of foreign medical schools, who tend to be overwhelmingly immigrant.
Due in part to some of the challenges students face in remaining in the state after graduation, Hawaii is also currently short of the professional workers it needs in critical STEM areas (Science, Technology, Engineering, and Math), the very fields that help the state’s economy remain innovative and competitive. According to the nonpartisan advocacy group Change the Equation, from 2009 to 2011 2.3 STEM jobs were posted online in Hawaii for every one unemployed STEM worker in the state. Even though the population of foreign-born STEM workers has declined over the last decade, new foreign-born STEM workers could help alleviate this shortage, as they have in other states.
Ratio of STEM jobs to unemployed STEM workers
Share of foreign-born advanced degree workers in STEM fields (2000)
Share of foreign-born advanced degree workers in STEM fields (2010)
Decrease in share of foreign-born STEM workers
Shortly after emigrating from Ireland to Hawaii at the age of 18, Maurice J. “Sully” Sullivan was stationed at Hickam Field in Honolulu during World War II. Through his work in the mess hall there he met many local farmers and See Goo Lau, the owner of a small grocery store in Kailua. After the war, Sullivan wanted to return to the mainland US to find work, choosing Buffalo, NY as his destination. Because of the inclement weather he encountered in Buffalo—he arrived there in winter—he was back in Hawaii within a week. After returning, Sullivan decided to start a one-stop food supermarket with Mrs. Lau. That was the start of the largest supermarket chain in Hawaii, as well as the modernization of the Hawaiian grocery business and the establishment of a now prominent family business (Sullivan married Mrs. Lau’s daughter). Today Sullivan’s daughter, Jenai Sullivan Wall, runs the company and the 32 stores the company owns statewide. As a company rooted in its community, Foodland is also involved in local projects that have contributed more than $6 million in educational supplies for Hawaiian schools.
Immigrants are helping to grow the US economy everywhere, not just in the places—like our biggest cities—that we expect. They are helping to fill labor shortages on America’s farms, starting businesses that employ US workers, and developing the cutting-edge products that make America the world’s preeminent innovation hub.
Click on a state to learn more about the contributions immigrants are making to the local economy.