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History of Hawaii's economy


Silversword fern Hawaii
Silversword fern Hawaii

Hawaii’s economic structure has undergone a succession of changes since the last years of the 18th century. At that time the native Hawaiians had a comparatively primitive but self-sufficient, ecologically sustainable economy based on farming and fishing. Subsequently, increased contact with the outside world brought a variety of new crops to the islands and spurred the development of trade. But there was no dominant economic development in Hawaii until the second half of the 19th century. Between the 1860s and 1930s, Hawaii’s economy was dominated by large plantation cultivation and the exporting of sugar and, beginning around 1900, pineapples. In the 1930s the U.S. government accelerated development of military installations in Hawaii. Federal expenditures in Hawaii before and during World War II (1939-1945) rapidly became a major source of income and employment. Although economic activity declined after the war, it recovered in the 1950s as efforts were made to reduce Hawaii’s economic reliance on a few sources of income. During the 1950s and 1960s, manufacturing was diversified and expanded, a large-scale tourist industry was developed, and trade with the mainland and foreign countries was increased.

Expenditures by the federal government, for both military and nonmilitary purposes, are a principal source of income for residents of Hawaii. Tourism is the most important driver of economic activity. Second in importance is manufacturing, followed by agriculture, which is dominated by sugar. In recent years, plantation production of both sugarcane and pineapple has declined significantly. For more than a century tariffs and advanced agricultural technology kept cultivation of these crops economically viable. Recently, the relatively high labor costs in Hawaii have weakened the commercial competitiveness of sugarcane and pineapple.

The large number of people engaged in trade reflects the importance of commerce to Hawaii, which must import many items. Hawaii had a work force of 628,000 in 2008. Of those, 41 percent were employed in the services, doing such jobs as working in hospitals or serving in restaurants.

Another 20 percent percent worked in federal, state, or local government, including those in the military; 20 percent in wholesale or retail trade; 35 percent in finance, insurance, or real estate; 19 percent in transportation or public utilities; 6 percent in construction; 4 percent in farming (including agricultural services), forestry, or fishing; and 3 percent in manufacturing. In 2007, 23 percent of Hawaii’s workers belonged to a labor union. Hawaii, along with New York, had the highest rate of unionization in the country. "Hawaii" © Emmanuel BUCHOT, Encarta, Wikipedia

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