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Hawaii’s unemployment rate is just 5.5 percent, lower than its been since the recession and far lower than the national average of 7.9 percent. But is that because Hawaii’s economy is healthy or because more people work multiple jobs here?
“[The rate] gives this misleading view of Hawaii’s economy,” said Carl Bonham, executive director of the University of Hawaii Economic Research Organization.
That’s because the unemployment rate ignores people who are forced to work part-time because they can’t find full-time work, as well as people who have given up looking for jobs, economists said.
To get a better picture of Hawaii’s unemployed, Bonham said he looks at another number that takes these people into account.
In Hawaii, that figure — called the U-6 rate — is 13.7 percent, just slightly lower than the national rate of 15 percent, according to the Bureau of Labor Statistics.
That offers a window into what the unemployment rate doesn’t say: People are holding part-time jobs, working multiple jobs and struggling to keep up with the high cost of living.
Working Multiple Jobs
Economists say there are many reasons why Hawaii’s unemployment rate is relatively low: Oahu was somewhat insulated from the recession, its military industry has been stable and its tourism industry has bounced back.
But another factor is the large number of people who work multiple jobs, according to Bonham and Leroy Laney, a professor at Hawaii Pacific University and an economic adviser at First Hawaiian Bank.
“A lot of people work a couple of jobs or maybe three jobs,” Laney said. “If you lose two of those jobs, your income goes down but you’re still considered employed.”
That means that even if a person loses one of their jobs, it won’t be reflected in the unemployment rate.
Bill Kunstman, spokesman for the Department of Labor and Industrial Relations, said the department doesn’t have any recent data on the number of people working more than one job.
“They haven’t done [studies on multiple job holders] for a number of years, certainly not since 2008,” he said.
Paul Brewbaker, a University of Hawaii professor and former chief economist for Bank of Hawaii, downplayed the effect of multiple jobholding on the unemployment rate, saying that the number of people holding more than one job in Hawaii has been decreasing.
Another missing piece to Hawaii’s unemployment picture is the number of workers who are forced to work part-time because they can’t find full-time jobs.
“There was a statistically significant increase in the number of people who are working less than 20 hours,” Bonham said.
A study published in the American Economic Journal in 2011 said the number of part-time jobs in the state has increased, in part due to the state law mandating employer-provided health insurance. The requirement doesn’t apply to part-time workers, making it cheaper for employers to hire them.
Bonham said the tendency to hire part-time workers probably has a greater effect on the state’s unemployment rate than the presence of unions in Hawaii.
Still, Kuntsman at DLIR said that state doesn’t collect data on part-time workers.
“No, that’s another puka for us,” Kunstman said. “Sometimes we have a higher job count [from employers] but the rate doesn’t change.”
Forced to Leave?
Hawaii’s unemployment rate also doesn’t take into account the number of people who lost their jobs and then left the islands due to the state’s high cost of living.
“A lot of people come here to take a job and if they lose it they just leave,” Laney said. “There is a certain amount of out-migration associated with that. Probably it’s at least somewhat higher here than in other states because we’re a very small isolated economy. If you don’t have roots here, then you might leave and go home.”
The number of people in Hawaii’s labor force decreased by about 19,000 between October 2011 and October 2012.
“People aren’t getting counted in the labor force,” Bohnam said, pointing to the decrease. He said the drop could reflect out-migration, people giving up looking for jobs, or other factors.
At the same time, Bonham said that the state’s high cost of living and isolation could help the employment rate because of the limited supply of workers.
“We don’t have as much in-migration for jobs over a short period of time,” he said.
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