Unions drove up the cost of sugar?
You mean by demanding wages in line with the rest of the US and trying to end the near slave labor system of the plantation days? Which was developed while Hawaii was still a kingdom and the "commoner" class of people had only recently been given the right to own land? The sugar barons said "Sure, you can have regular wages... for as long as it takes us to pack up and head to the Philippines where they don't have things like labor laws, yet." A lot of locals think of "those golden good old days" of plenty employment back in the plantation era but forget the terrible working conditions, slave-like class systems and even hangings of the community leaders in the early days. Here on the Big Island the economy flat-lined after the plantations shut down and moved out - and a lot of the "well, grampa said it was this way so its this way" folks are still looking for the next monolithic employer to make everything OK again.
These days the construction unions are a different story. They're just doing what unions do - protecting the income of their members. They don't notice or care that no one is buying new homes since the builders still get paid to build them. Maybe they're trying to build so much stuff that the price finally starts to come down.
[Anthropologist Mode = ON]
Ren nailed it, I think. Tourism is the blessing and curse of the Hawaiian economy and has been since the dawn of inexpensive air travel. Since the 60's the 2 main industries have been tourism (to get people and their money here) and construction (to provide high dollar nests for those who decide to stay.) Like in other places in the US, the prime ag land was built over and the state got high as a kite on the increased tax revenue. Waikiki used to be lo'i you know. Where do you think all that water went before they built the Ala Wai? Perfect for taro. Not so good for tourism, building, high dollar hotels and beaches full of nearly nude beauties looking for a sugar daddy.
Of course, since we have little food production infrastructure left most food needs to be shipped in so prices go up and fluctuate with the value of oil. Hawaii could ~easily~ feed itself - hell, the Big Island alone could feed the rest of the whole state - but that doesn't make money coming and going the way the current food system is set up. You can thank the missionaries for that. As those 5 families took over Hawaii from the monarchy they dismantled the lo'is, potato fields and fish ponds, took control of the fresh water and created both the shipping companies and the grocery stores. In the early days they did this with the help of the monarchy. Kamehameha I leveled the sandalwood forests that used to cover the now barren dry side of the BI and sold them to Japan. He was no fool: he quickly liquidated his assets and made a fortune in the new, international market that he had access to. Since then most of the topsoil from the dry side has eroded into the reef and killed it and that fortune has disappeared into the world banking system... but it still seemed like a good idea at the time.
The State, meanwhile, is also looking for that monolithic thing that will make everything OK again. It isn't interested in a local, diversified agricultural systems that would feed the islands and bring down prices. It wants the new sugar or pineapple cash crop that will sell for MORE than locals will pay for it so it can get the tax revenue. Since that isn't going to happen it pretty much relegates ag land concerns to making sure there are enough flowers for leis, and ti and taro for the tourist luaus. Other than tourism and construction the State is banking on GMO research. That is one of its bets on what is going to be the next Big Thing. Folks who point to the Coqui and Mongoose as reasons why this might not be such a good idea here are generally ignored.
Underlying the whole mess is the fact that only about 6% of the land in Hawaii is available for private ownership. Of the rest, half belongs to one governmental faction or another and half belongs to 1 of 6 land trusts. 5 from the descendants of the Missionaries and 1 "hawaiian" trust - which also has root in the missionary families. Lease agreements used to be simple but now that land value has gone through the roof those leases are, too. Land prices are simply not going to go down to anywhere near reasonable any time soon.
Nowhere and never have the systems set up in Hawaii been for the general well being of the middle class or local economy. Since the days before the kingdom Hawaii has been a starkly divided upper class that "cares for" an enormous lower class that feeds them with their labor. These days that labor is becoming less and less relevant so the "caring for" has fallen to the State. It is a very old pattern here that has little chance of changing with current economic priorities since no one (that matters) is interested in setting up a system where people can work and afford to take care of themselves - outside of the construction and tourism standbys that aren't doing so well right now.
The current business creation environment is toxic to everyone - not only because of the Nanny State problem but because the whole system has been rigged from early on to keep things the way they are and money flowing through the hands of those it already flows through. With the economy grinding to a halt those folks have more than enough cushion to ride it out. Why spoil a good thing just because a few people can't afford to live here anymore? Why encourage small businesses that will just increase competition? Let them eat cake.
Which is why there is a large subset of the locals that pine for the "good old days" when life still sucked but at least you had work and the company would take care of you. Same story as everywhere else. The L&N don't stop here any more, the coal mines are shut down and the youngin's have moved to the city. Or the steel mills have all been shuttered. Family farms are foreclosed and consolidated into big agribusiness. Walmart, Starbuck and McDonalds kill off their local forerunners. The only thing unique about this trend in Hawaii is that some of the vacuum is filled by people with more money than the ones before. Many of them are "job creators" but they are creating jobs somewhere else and coming here to relax.
Welcome to paradise.
[/Anthropologist]