What is cost of Labor and why do Hawaii jobs pay so much less?

Question

I live in Hawaii and recently heard my large, Hawaii-based employer use the term “cost of labor” when explaining how they derived the organization’s new salary ranges. It’s no surprise that jobs and companies in Hawaii generally pay less than equivalent jobs/companies on the mainland. But when I asked my employer on an all-company call to explain what cost of labor actually is and why Hawaii employers can pay so much less than companies on the mainland, the answer the consultant provided was largely a non-answer.

Can someone explain to me like I’m 5, why is Hawaii’s cost of labor so low compared to the mainland?

(Edit: for clarification, cost of living and cost of labor are different terms, and I’m wondering why the cost of labor in Hawaii Is so disproportionate to the cost of living compared to parts of the mainland that also have high costs of living, such as much of California, NYC, Washington, and so on. The disparity between these two terms seems much more significant in Hawaii)

In: Economics

Answer 1

Like many others, I love Hawaii and mentally masturbate to living there whenever I visit. On one such trip I decided to look into job opportunities and the possibility of actually making it happen. Maui 2009, I was an auto mechanic making $35 per hour, easily transferable job, can take my skills anywhere so this is an apples to apples comparison. I walked into a couple independent shops and a couple dealerships near the airport. The highest offer I received was $18 per hour. The cheapest 1 bedroom apartment I could find, nowhere near the beach of course, was around $1,700 per month. I figured in a few other expenses and decided there was no way I was going to make it work and have any kind of life. There is absolutely a paradise tax, I was literally told they didn’t have to pay more because of it. There’s also a lot of poverty there. Was in Oahu last year and saw it, drive a few minutes up past the Aulani resort and you’re in the Hawaiian hood. Not the only poor area of Oahu but it’s probably the most obvious.