In this economy, the right question may not be "Have we hit bottom yet?" but "When will the ground quit shaking?"
And the answer is: We don’t know. The safest assumption is that things may be getting better, but too slowly to support the risk of big new spending.
Worries about a double-dip recession have not entirely abated. Continuing fears about debt in Eurozone countries is linked with recovery on this side of the Atlantic that can only be called halting. After some encouraging job numbers earlier in the spring, a more recent report showed most of the new jobs nationally linked to the temporary hiring boost from the U.S. census.
With every bump in the rocky road, the stock market tumbles. And then rallies, only to slip again.
None of this fills Hawaii employers with confidence about long-term hires, as writer Alan Yonan Jr. chronicled in his report on the latest economic outlook, released Friday.
This report, by economists with the University of Hawaii Economic Research Organization, looked back on the recession which, in hindsight, now appears to have done more damage than anyone realized.
Wage and salary jobs statewide fell by about 6 percent since the downturn started in late 2007. It’s a deep hole, a deficit made more difficult to erase by the loss not only of jobs, but of job capacity. Large-scale closures such as Aloha Airlines and NCL America and plantation shutdowns mean that job creation will have to proceed at an exceptional pace.
And employers just aren’t quite satisfied by what they read in the economic tea leaves, not enough to risk the long-term investment of new hires.
There are glimmerings of hope, according to the UHERO report. The long winter for construction jobs will start defrosting in the next year, as government projects, many of them using funds from the American Reinvestment and Recovery Act, start ramping up. Visitor counts will rise gradually.
But economists caution against expecting recovery to graph as a straight incline. Hawaii’s economy depends heavily on residents elsewhere feeling confident enough to spend their precious disposable income on a trip.
And, judging by a disappointing tumble in retail sales nationally on Friday, the general mood across the country is none too confident. Hawaii needs a sustained rebound in consumer spending, not just a short-lived hiccup, to convince employers that the financial tremors are calming.
For its part, the Lingle administration is trying to prime the pump for hiring with programs to subsidize some of the job-creation costs for employers. The volunteer internship program for those on unemployment gives workers a chance to gain new skills and a potential new job and allows employers to have the opportunity to try out a potential staffer.
Premium Plus reimburses employers for half the health-care coverage premium for new hires who were previously unemployed and who earn no more than 450 percent of the federal poverty level.
These are limited initiatives, of course: Unemployed workers may resist internships that take time without bringing in additional pay. And health insurance is only part of a business’ hiring costs, so the inducement may not appeal to every employer.
But the state should continue to support even small measures that lower the hurdles for employers and prepare workers for a change in career. Economic recovery won’t happen in any lasting way until there are enough working people to support it. The light at the end is visible, at least, but we’re not even at the midway point in a long tunnel.