Hawaii
Hawaii is America's Worst State for Business in 2024, with off-the-charts costs and climate risks rising
An aerial image taken Aug. 10, 2023, shows destroyed homes and buildings burned to the ground in Lahaina in the aftermath of wildfires in western Maui, Hawaii.
Patrick T. Fallon | Afp | Getty Images
First came the Covid-19 pandemic, striking at the very heart of Hawaii’s economy.
Then, just as the state was beginning to recover, came last summer’s deadly Maui wildfires, which killed more than 100 people, destroyed upward of 2,000 structures, did $5.5 billion in damage and paralyzed the state’s tourism industry yet again.
Finishing last in CNBC’s 2024 competitiveness ranking, America’s Top States for Business, seems pretty minor in comparison to all of that. But Hawaii’s economic issues go even deeper than the high-profile tragedies that have befallen the state.
Consider the Honoapiilani Highway.
Hawaii Route 30 hugs the western shore of Maui. Well before the fires, state transportation officials warned in a 2021 report about climate risks that the highway was at risk from rockfalls, landslides, flooding from high waves, storm surges, coastal erosion and even tsunamis. Already, portions of the road frequently close due to flooding.
“Given our understanding of what is changing, we need to make some tough decisions to ensure the long-term viability of the State,” the report said.
A sign is posted warning of earthquake damage to the road from seismic activity at the Kilauea volcano on Hawaii’s Big Island, in Hawaii Volcanoes National Park on May 17, 2018.
Mario Tama | Getty Images
Hawaii was never going to do well in a competitive ranking that emphasizes infrastructure, as this year’s does. The state is remote — 2,400 miles from the mainland — and as an island chain, basic infrastructure features that are important elsewhere, such as freight rail, are irrelevant. But now, even the infrastructure the state does have is under threat, such as the Honoapiilani Highway.
“That’s the only link to the rest of the island from the area where the wildfires were,” said U.S. Secretary of Transportation Pete Buttigieg, who visited Hawaii in February.
The state is set to receive $2.8 billion under the Bipartisan Infrastructure Law, and nearly half of it will go toward rebuilding bridges and roads. Some $160 million of that will go toward relocating portions of the Honoapiilani Highway.
“We’re funding them to raise that highway to higher ground,” Buttigieg told CNBC. “We’re not going to make somebody build a road the exact same way if it’s getting washed out year after year by what used to be a once-in-100-years event.”
In an aerial view, cars back up for miles on the Honoapiilani Highway as residents are allowed back into areas affected by the wildfire, in Wailuku, Hawaii, on Aug. 11, 2023.
Justin Sullivan | Getty Images
It will be at least 2027 before the improvements are complete, transportation planners say. Add the many other roads and bridges needing help, and it begins to explain why Hawaii’s infrastructure ranks No. 47 in this year’s Top States study.
The high cost of paradise
Hawaii is also America’s most expensive state to do business in, with the third-highest cost of living. Residents and businesses pay the nation’s highest utility costs, and corporate and individual taxes are high.
With so many inherent disadvantages, why doesn’t Hawaii finish at the bottom of the rankings every year? The answer, in part, is because it’s Hawaii, with a legendary quality of life. But now, even that is under siege.
Hawaii ranks No. 7 for Quality of Life in 2024, its lowest ranking in the important category since our Top States study began in 2007.
It is not that Hawaii isn’t still a paradise. But even in a paradise, working families need child care.
While licensed child-care facilities are readily available in Hawaii, they are prohibitively expensive. According to Child Care Aware of America, child care in Hawaii costs 18% of the median income for a married couple. That is the most expensive in the country, and nearly twice the national average.
Multiple studies have linked quality child care and preschool to economic competitiveness.
In 2022, the Hawaii legislature approved $200 million in spending for new prekindergarten classrooms, part of a broader goal championed by Lt. Gov. Sylvia Luke to offer universal pre-K for three- and four-year-olds in the state by 2032.
A family walks on the beach together during sunset in Kauai, Hawaii.
Fly View Productions | E+ | Getty Images
“Access to preschool is a social justice issue for Hawaii,” Luke said in a statement at the time. “Children who have attended high-quality preschool or child-care programs are much better prepared for success in kindergarten, but not every family has access to early learning programs.”
The plan was to build 80 new classrooms by this August, with ambitious annual goals after that. But according to a website for the program run by Luke’s office, the program is already falling short of its goals. Two years after the bill was passed, only about half the money has been spent. Just 13 classrooms have been built, with another 50 under construction. The physical facilities are just part of the battle. Hawaii also faces a serious shortage of child-care workers.
An economy struggling to rebound
Put it all together, and it leads to America’s second-worst economy, according to the Top States study, after Mississippi. It is little surprise that no major companies are headquartered there. Economic growth was modest last year as the state struggled to recover from the wildfires, and job growth was meager at best.
In their most recent quarterly economic outlook, published in June, forecasters with the state’s Department of Business, Economic Development and Tourism predicted that tourism will end the year flat following a 4% drop in the first four months of the year, largely due to the wildfires.
They do expect visitor traffic to bounce back next year, and to continue growing — albeit at more modest levels — through 2026.
But in America’s Bottom State for Business, they have learned the hard way that Mother Nature can have other ideas.
HONOLULU (HawaiiNewsNow) – If you grew up in Hawaii, a visit to your local Crackseed shop is likely a core childhood memory.
Let’s go holoholo to one of the oldest shops in Honolulu, Kay’s Crackseed.
Any time Lanette Mahelona of Kaneohe is in Manoa, a stop at Kay’s Crackseed is a must!
“I stop by here, and I always grab two pounds of this seedless creamy ume because it’s hard to find on our end of the island, Kaneohe,” said Mahelona.
Kay’s Crackseed sits in a four-hundred-square-foot shop at Manoa Marketplace.
The original owner, Kay, opened the shop in 1978 and ran it for 18 years.
Mei Chang now runs the shop. Her family took it over in 1996. They’ve been selling an assortment of crack seed and products, which Mei says is a healthy snack in the eyes of the Chinese.
“Yeah, so like the ginger, the Chinese always say it’s Chinese medicine, so they help your motion sickness, the stomach, and even the kumquat,” said Chang. “It’s like honey lime ball, if you catch a cold, sore throat, they help a lot.”
Customers are encouraged to sample the different treats.
Now working in a crack seed shop isn’t anything new for Chang.
She said these kinds of shops are in common in Taiwan that her grandparents used to sell different kinds of li hing mui.
Chang lived right above her grandparents’ shop and was in the second grade when she started helping them with the business.
“Every day when I finish school first thing open a jar,” said Chang. “I really like the football seed, so every day I eat a football seed for my snack.”
And talk about a full circle moment, her daughter would also help around the Manoa shop.
Through Kay’s Crackseed, Chang hopes to carry on traditional recipes she learned from her grandparents.
“Crack seed for us is not only the snack, but it’s like childhood memory, yeah, the happiness, so we try to keep doing the tradition. So, all the juice we make here is from our grandpa and grandma’s recipe,” said Chang. “So, a special yeah, secret sauce, so we have some customers that live far away, the other side of the island, drive so far to come here to get the li hing one. The wet li hing mui, the rock salt palm, is really popular.”
“The li hing mui ones are not as sweet, sweet as other places, and it’s soft,” said Crystal Kaluna of Kauai.
Copyright 2026 Hawaii News Now. All rights reserved.
HONOLULU (HawaiiNewsNow) – The Kolekole Pass is officially allowed to be used as an evacuation route in the event of an emergency on West Oahu.
U.S. military and civilian officials signed an updated official memorandum of understanding Wednesday, opening Kolekole Pass for emergency use.
The first document was signed just prior to July 29, 2025, when Hawaii faced a tsunami warning, and the pass was opened for West Oahu residents to evacuate.
Nearly 500 vehicles made their way through the pass that day as many evacuated the Leeward Coast, officials said.
Maj. Gen. James Batholomees, U.S. Army Commander, Hawaii, was joined by his counterparts from Joint Base Pearl Harbor-Hickam and the state Department of Transportation officers for Wednesday’s signing.
Batholomees said he took command the day before the tsunami warning.
“The next day, the first order that I had the blessing of giving was in conjunction with the Navy opening the pass during the tsunami,” he said.
Kupuna from the Leeward Coast also attended the signing, saying they were happy for a much-needed secondary route in the event that Farrington Highway is shut down.
Leeward Coast resident William Aila recalled when Farrington Highway was closed for 11 days due to Hurricane Iwa in 1982.
“We need an opportunity to bring in first aid, to bring in food, and to bring in other emergency supplies,” said Aila.
Officials say they are committed to conducting a mass evacuation rehearsal using Kolekole Pass every year.
Ed Sniffen, director of the state Department of Transportation, said it’s the key to a successful activation to use the route.
“The road is safe,” said Sniffen. “When we rode through this, and we did this twice with large operations, the road is safe.”
He added, “That being said, there are improvements that we still want to make.”
HDOT continues to work with the U.S. Army and U.S. Navy on upgrading the roadway, which may total $20 million in improvements.
Copyright 2026 Hawaii News Now. All rights reserved.
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