Hawaii’s unemployment rate is projected to soar to 25% later this year in the economic free-fall triggered by the coronavirus disaster, but the state is also in line to receive at least $4 billion in federal aid from the new federal relief bill approved on Friday, according to testimony before a select state House committee this morning.
Carl Bonham, executive director of the University of Hawaii Economic Research Organization (UHERO), said there is vast uncertainty in the UHERO projections, in large part because “there is no comparison for this.” Hawaii’s unemployment rate in January was 2.7%.
“We know Hawaii is already in a deep recession, and that recession will surpass anything that we’ve seen in our lifetimes,” Bonham testified today before the House Select Committee on COVID-19 Economic and Financial Preparedness.
“There’s really not any comparison that you can make to an economy where you’ve basically shut down hospitality and tourism, and will remain shut down for several months,” he said. He predicted the unemployment rate will begin to drop back down later in the year after peaking in the second quarter.
UHERO projects unemployment in Hawaii will hit bottom in the second quarter of this year before beginning to rebound, Bonham said.
U.S. Sen Brian Schatz testified that there will be a minimum in federal assistance coming to Hawaii from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, including $1.25 billion to help fund state and county government response efforts, and $1.14 billion in estimated unemployment assistance.
Hawaii will also receive $1.24 billion in estimated direct cash payments to Hawaii residents, and $130 million in estimated funding for the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps.
Another $53 million will be paid out in Hawaii to support local schools and colleges during the pandemic, and another $11 million will be forthcoming to help support Hawaii’s community health centers. Another $8 million in Community Development Block Grants is also being earmarked for Hawaii.