Broaden state’s recovery efforts

Hawaii’s economic engine of tourism is booming, so why hasn’t it trickled down to the rest of the state’s economy? Economists answer, for now, that tourism is not the giant that it used to be, but it is leading the way for the state’s recovery. Not to worry.

Visitor arrivals are expected to increase by 8.6 percent this year, much higher than the earlier forecast of 6.5 percent, according to the state Department of Business, Economic Development and Tourism.

However, the overall economy is expected to increase this year by only 2 percent.

As a result, Hawaii’s number of "leisure and hospitality" jobs increased by 5 percent during this year’s first half compared with the same period a year earlier, but job numbers dropped by 9 percent in the information sector, 2 percent in construction and 0.3 percent in government, according to the U.S. Bureau of Labor Statistics.

"While nontourism sectors have still not fully recovered, they are showing positive signs of recovery," Richard Lim, the DBEDT director, said last week. "That’s why we are focused on policy tools and state support in areas such as construction, renewable energy and light manufacturing."

A major reason for the lack of a spillover of tourism may be that it is not the 800-pound gorilla it was not too long ago. While tourism consisted of 25 percent of the economy during the mid-1990s, it has shrunk to 15 percent, according to Eugene Tian, acting state economist.

That was made worse by the 2008 demise of Aloha Airlines and ATA Airlines, said local economist Paul Brewbaker.

Figures show that tourism has recovered spectacularly enough to restore its share of the state’s economy.

"By my calculation," Brewbaker said, "we’re at record volume this year already, so that principle could have brought it back to a quarter of the economy, except that we know that visitors don’t spend as much as they used to in real terms."

Hawaii, and the rest of the nation, have gone so long without hopeful economic news that any sign of recovery can be quickly spun out of proportion. But in Hawaii, myriad signs are rightfully stoking cautious optimism.

The University of Hawaii Economic Research Organization has projected an increase in construction activity this year after expectations of recovery last year failed to materialize.

Now, it says, "Single-family home construction languishes, but new high-rise condos, retail and resort-related development will boost nonresidential building."

It predicts that construction jobs will grow by 2.1 percent this year.

Construction of the rail project on Oahu could be a major part of the boost, Brewbaker said, especially to "the extent to which the project can actually mobilize private development associated with the train. The train has the potential magnet for private development."

We have to agree with Brewbaker’s high optimism overall, as the state is "right around the corner" in greeting as many as 8 million visitors in a year.

"Lucky for us that we even have that," he said of tourism’s boom, "because the reason it isn’t kicking is probably because the rest of the economy hasn’t caught up.

"So then the question should be: What do we do to get the rest of the economy to catch up, because it doesn’t make any sense to have half the cylinders working and the other half of the engine just under repair."

State policy makers should take heed.

Voters, too, need to be asking their elected officials for real policy visions and ways to shore up Hawaii’s economy, and to drive it forward.

Now’s the time, with so many of the politicians’ jobs on the line in November’s general election, to insist on answers and action from lawmakers.