Economic Impact of the Armed Forces in Hawaii

January 2009

The total spending by the armed services in Hawaii in 2007 was $8.2 billion.  This infusion of funds to the Hawaii economy is the second major source of revenues to the state – second only to tourism.  More importantly, the military accounts for more than 110,000 jobs in Hawaii.

According to Hawaii Business News of May 2008, the state receives far more than $1 billion in military spending: Department of Defense Hawaii expenditures, which include payroll, procurement contracts and grants, reached $6.1 billion in FY 2006, ranking Hawaii 25th among the 50 states and Washington, D.C. The total is up from $5.6 billion in FY 2005 and $3.3 billion in FY 1996. More than half of those totals go towards payroll of military personnel and civilians employed by the DoD. The rest goes directly to local businesses in the form of procurement contracts or research grants.

Just how much is that? “I can tell you military spending accounts for about 23 percent of the total Oahu economy, and tourism is around 30 percent,” says Lawrence Boyd, labor economist at the University of Hawaii West Oahu.

Click here to view visual graphs.