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

I went to University of Hawaii and have family in the state. There’s two things affecting this phenomena in my opinion. #1: A captured labor market-there are few alternative options for employment in such a small place, so people take what they can get, since not buying into the bullshit wage/salary cartel means moving to the mainland and leaving friends/family/one of the most beautiful places on the planet. #2: Very controversially, plantation culture. Hawaii was, until very recently (and arguably still is) somewhat of a banana republic with very oppressive labor practices. The economy of the state during the territorial era revolved entirely around plantations (sugar and pineapple primarily), and was reliant on near-slave conditions of immigrant workers. Bold and loud workers were not long for that world, and 4-5 generations of obedient “don’t rock the boat” culture created a working class that is “thankful to have a job”. I saw it with my own eyes at the various companies I worked for there, and I see it in my family. Couple that with the fact that the majority of folks in Hawaii are of Asian descent, and value humble, hardworking, and obedient behavior, and you have a very exploitable workforce.