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Paul Brewbaker, Joanne Punu, and James Mak join Roth on November 6, 1993 to examine the "paradise tax" — the premium paid to live in Hawaii. Brewbaker supplies the figure: roughly 39 to 40 percent above the mainland average for a standard four-person family budget in 1992, though he notes the gap is smaller when Honolulu is compared to major coastal cities. He traces the rise from about 22 percent in the mid-1980s to current levels, driven mainly by the housing boom and the 1986 federal tax reform. The panel is more troubled by a second finding: higher-educated workers in Hawaii earn less than their mainland counterparts, and the penalty grows with educational level. Mak attributes this to tourism generating low-skilled jobs. Punu warns that the resulting brain drain could hollow out Hawaii's middle class, leaving rich and poor to set policy with no one in between — a social fracture harder to measure than any cost-of-living index. Brewbaker argues the differential partly reflects what residents choose to pay for the lifestyle. All three agree that policy-driven contributors — housing costs, tax burdens, over-reliance on tourism — should be addressed, even if the underlying premium cannot be fully eliminated.
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