Here’s a glimpse of just how noxious the coronavirus pandemic — combined with travel restrictions and stay-at-home work orders — has been for the Aloha State’s tourism-driven economy.
More than 220,000 workers are no longer on the job, the University of Hawaii Economic Research Organization found in a survey conducted with the assistance of a dozen business and professional organizations.
Many of the losses came in the hotel accommodations industry as well as retail, recreation and arts and entertainment, which all saw a nearly 80% decline in full time employment. The food service industry has also suffered massive losses: the 58% decline amounts to a loss of just less than 36,000 jobs, the survey found.
Add to that a substantial percentage of the workers who are now unemployed were already living on the financial edge, earning less than $50,000 in a high cost of living environment, and the situation becomes all the more dire.
“The most vulnerable workers are also the most impacted,” UHERO reported. “This will have wide-ranging consequences for these families and the need for supportive social services.”
Those details come from preliminary survey results released Monday by UHERO and presented to Hawaii state legislators and other business leaders on a select committee to address COVID-19’s impact on the local economy.
The results are based on detailed economic data, such as unemployment figures, and interviews with more than 600 Hawaii businesses. The survey was promoted by numerous business and professional organizations, including the Chamber of Commerce Hawaii; Hawaii Island, Kauai and Maui chambers of commerce; The Retail Merchants Association of Hawaii; the Pacific Resource Partnership; Hawaii State Bar Association; Hawaii Restaurant Association; the Chinese Chamber of Commerce; Kalihi Business Association; the Hawaii Foreign-Trade Zone, and the Hawaii Food Manufacturing Association.
Carl Bonham, who’s the executive director of UHERO and member of the panel, told the committee that any recovery is going to be slow although many businesses say they should be able to pull through — assuming they are allowed to reopen soon.
CORONAVIRUS IN HAWAII
Want to know more about COVID-19 in Hawaii? Here’s where to get the latest data on cases and transmission.
“The losses are exactly where you think they would be and they’re quite large,” Bonham said, noting that the most financially vulnerable workers are the ones being hurt most. “This data is useful because it informs us as we begin to think about the recovery process.”
What the UHERO analysis revealed is just how hard it will be for Hawaii’s economy to rebound.
Of the 623 businesses that participated in the survey, nearly 60% said they believed they could be up and running almost immediately with full staff once it was safe to do so. The remaining 40% would have to wait for tourists to return.
A large number of businesses simply won’t survive in the interim, especially if there’s not enough federal money to go around through programs, such as the Small Business Administration’s Paycheck Protection Program that Congress has funded with billions of dollars.
Nearly one in four businesses told UHERO researchers they would close without more money from the government. Another 32% said they would need to trim staff just to stay afloat.
According to UHERO, the survey did not find any “statistically meaningful differences in outlook based on the gender or ethnicity of the business owner.”
Philip Garboden, a professor in UH’s Department of Urban and Regional Planning who authored the report, said in an interview that what’s most important are the overarching points: a substantial percentage of businesses are pessimistic and many say they need more help from government.
Sherry Menor-McNamara, president and chief executive of the Hawaii Chamber, said the organization has asked the state for help but heard nothing.
“Federal funding is not enough; while it’s helpful, it’s not enough,” she said.
“At some point there’s going to be a tipping point where businesses just can’t keep their doors open any more,” she said.
Many of the assumptions are based on Hawaii Gov. David Ige lifting various virus-related restrictions at the end of May that will allow the economy to rev from its slumber.
Those assumptions also rely on the state being able to ramp up its COVID-19 surveillance, testing and contact tracing abilities to monitor the spread of the virus and keep a future flare up in check by quarantining individuals who may have been exposed.
At this point it’s unclear whether the state has the staff and the resources to take on such a complicated endeavor, although officials say they are in the process of developing a plan that allows certain businesses that have less direct contact with people to open as the outbreak subsides.
What seems certain, though, is that the state’s economy will not look anything like it did before the pandemic when it hosted nearly 10 million tourists annually in the islands.
“We may be a little bit smaller after this is all over, even state government might be a bit smaller and we’ll have to retrofit,” House Speaker Scott Saiki said during a conference call with reporters after Monday’s hearing. “We always said that the transition during the recovery was going to take time. It’s not going to be immediate. Adjustments are going to have to be made along the way.”
Civil Beat reporter Stewart Yerton contributed to this report.
Sign up for our FREE morning newsletter and face each day more informed.
Not a subscription
Civil Beat is a small nonprofit newsroom, and we’re committed to a paywall-free website and subscription-free content because we believe in journalism as a public service.
That’s why donations from readers like you are essential to our continued existence.
Help keep our journalism free for all readers by becoming a monthly member of Civil Beat today.