For years, policymakers in Hawaiʻi have spoken of the urgent need to diversify our economy to be less reliant on tourism. The visitor industry, which accounts for a third of all jobs in Hawaiʻi, is heavily interconnected with global markets and susceptible to economic shock events such as the September 11 terrorist attacks, the Fukushima nuclear accident, or a global pandemic like COVID-19. With our tourism-centered economy, such global events take a heavier toll on Hawaiʻi than most other states.
Between January 1 and April 18, 2020, Hawaiʻi’s unemployment rate escalated from 2.7 percent to 28.2 percent, a staggering tenfold increase. During this period the Department of Labor and Industrial Relations (DLIR) received 185,146 initial unemployment claims. Predictably, unemployment rates varied across islands. Oʻahu, which has the largest number of jobs, had the greatest number of people filing for unemployment (110,421), but lowest unemployment rate (23 percent).
The number of first time filers for Maui and Kauaʻi were 35,532 and 14,634, respectively, but, because the total number of jobs on those islands is small, each county had a sobering 44 percent unemployment rate. Hawaiʻi County had 24,559 first time filers for an unemployment rate of 34 percent.
Reminding us that we need to think about how we rebuild the economy, Hawaiʻi’s most vulnerable jobs—the bulk of the jobs lost—are those that support the visitor industry, and include retail, accommodations, and food service jobs. That’s why heavily visitor-dependent Maui and Kauaʻi Counties lost the highest percentage of jobs while Honolulu County, with more economic diversity, has retained a greater percent of them. Visitor industry jobs are more likely to offer low-paying and hourly positions, and are subject to economic and health conditions beyond local control.
Hawaiʻi has the fourth highest job-loss rate in the country, a rate that’s about a third higher than the U.S. average. Only South Dakota has escaped double-digit unemployment. The reasons rates vary are different across states, but at least Hawaiʻi and Nevada share the problem of having economies overly-dependent on tourism.