Updated | Sun, sea, surf and lava: Hawaii is a tropical paradise with all the modern amenities you could wish for. But there’s a catch—it’s cripplingly expensive.
For the seventh year in a row, Hawaii has been voted the worst state in which to make a living by MoneyRates, a personal finance website. To work out the stats, MoneyRates looked at the median salary, taxes, the unemployment rate and the general cost of living.
Although the islands have the 10th highest median wage in the United States, average living expenses are astronomical, up to two-thirds higher than the rest of the country. For example, the average salary in the island’s capital, Honolulu, is $60,328, according to the website Payscale, but the state has one of the highest tax rates in the country, at 5.3 percent. According to the Bureau of Labor Statistics, the average U.S. salary, as of 2017, is $44,148.
Expatistan, a website that works out how much it costs to move to a new city, estimates that lunch costs $15 a head in Hawaii. The same site says that to live in a "normal" (rather than expensive) area, a couple would have to fork out $2,024 for a 900-square-foot apartment in Honolulu.
A basic dinner out for two in a neighborhood pub is an eye-watering $62, while 2 pounds of apples hovers around the $5 mark.
To put Hawaiian prices into context, it is the most expensive place in the world to buy four rolls of toilet paper ($6), and the priciest place in the U.S. to buy gas.
On the plus side, Hawaii has one of the U.S.’s lowest unemployment rates, with just 2.7 percent of citizens looking for jobs.
Hawaii’s high cost of living is driven by the need to import everything to the island either by sea or plane. Another big driver is housing costs. Lawrence Boyd, an economist and associate specialist with the University of Hawaii Center for Labor Education Research, told Hawaii News Now: "Basically, what Hawaii has become is a preferred place for the international 1 percent to buy property.”
Experts also blame Hawaii’s high cost of living on the extortionate cost of electricity, which is twice as high as Alaska’s, the next most expensive state for energy.
The second worst place to earn a living is California, which also features extremely high rental and living costs, despite having one of the highest median salaries in the United States. Silicon Valley salaries push the rent and cost of living up: The average salary in the tech capital is $94,572, which is 43 percent higher than the average United States salary.
After California comes Montana, followed by West Virginia, Vermont and Oregon.
The state where income goes furthest is Washington. There is no income tax, and incomes are higher than the U.S. average. Two pounds of apples costs $3 in Seattle, and monthly rent in a normal area for a 900-square-foot apartment costs $1,882. And four rolls of toilet paper cost just $3.86.
Following Washington is Minnesota, then Illinois, Texas and Colorado. Texas is almost always included in the places where money goes furthest in the United States, as there is no income tax and cost of living is well below the national average.
Correction: An earlier version of this story mistakenly said Seattle is the capital of Washington. The capital of Washington is Olympia.