Travel-related job losses nationwide due to the COVID-19 pandemic now double unemployment for the whole country during the Great Depression.
The U.S. Travel Association reported Tuesday that 51% of the 15.8 million travel-related jobs have disappeared since the coronavirus outbreak. That’s more than twice the 25% unemployment rate experienced at the height of the Great Depression.
Hawaii, where tourism is 17% of GDP — the largest piece of the economy — has taken a huge hit.
The U.S. Travel Association doesn’t have a breakout of Hawaii’s travel-related job losses; however, in 2019 the Hawaii Tourism Authority estimated that tourism supported approximately 216,000 jobs across the state.
On Tuesday the state Department of Labor and Industrial Relations reported that there were 238,051 unemployment claims. Many of these job losses are tied at least partially to the astonishing shutdown of Hawaii’s visitor industry.
To be sure, 9,500 or so workers out of 12,000 Unite Here Local 5 labor union members are currently unemployed, said Local 5 spokesman Bryant de Venecia.
“Most everyone on the travel side is laid off,” de Venecia said.
The union’s main interim concern is ensuring that members have health care coverage, he said.
“Right now the travel industry is only in the very early stages of having a reopening plan, so there haven’t been any discussions yet about getting workers back to work,” de Venecia said. “Even when Hawaii’s travel industry does reopen, recovery will be slow. We don’t expect all of our workers to be back to work once they reopen.”
In the meantime a top Local 5 concern is ensuring that unemployed workers have health care during the pandemic, he added.
Most hotel workers will be able to use the union’s health care trust fund, which includes contributions from union workers and employers, to extend health care coverage through the end of September, he said. However, Local 5 is still bargaining with HMSHost to extend health care coverage past May 31 for union members who work at the airport, de Venecia said.
The outlook for Hawaii tourism is still uncertain. Visitors still may fly to Hawaii, and hotels are open. But the industry has collapsed amid COVID-19-related fears and government regulations. Short-term vacation rentals aren’t considered essential businesses.
On March 26 the state instituted a mandatory 14-day self-quarantine for incoming passengers, which was extended to interisland passengers April 1. Both quarantine orders are slated to run through June 30.
Last year an average of 30,000 out-of-state passengers came to Hawaii daily. From March 26 to Friday, fewer than 8,176 came.
Hawaii’s substantial arrivals losses have led to major spending declines that are trickling down throughout the economy.
The U.S. Travel Association said spending in Hawaii during the week that ended May 9 fell 96% to $22 million, a $504 million plummet from the same week during the prior year. In comparison, nationwide travel spending dropped 87% year-over-year for the week ended May 9.
“Our national economy is in a recession, but the travel industry is already in a depression,” U.S. Travel Association President and CEO Roger Dow said in a statement. “Travel-related businesses have been hit disproportionately hard by the pandemic’s fallout, and unfortunately our workforce is on the front lines of that struggle.”
Miles Quartero, who had worked as a Hilton Hawaiian Village bellman for 25 years before the pandemic, knows all too well how hard Hawaii’s travel industry has been hit.
Quartero, who was laid off March 22, said he didn’t start receiving unemployment checks until April 25 and is still awaiting back pay. Times are tight as he and his wife, who is still working, live in a household with three kids and two in-laws. He’s worried others have it even harder.
“Tourism runs a lot of communities. Without tourism a lot of the people can’t support or help support their families,” Quartero said, adding that he worries about pensioners, too.
De Venecia said Local 5 members receiving a current pension are OK. However, if workers aren’t getting paychecks, funds for health care, pension and other benefits aren’t being sustained.
Quartero said the trickle-down impacts of that shortfall and others could be enormous as people are forced to make tough decisions about how to spread limited resources.
“Do I pay for a roof over my head? Do I pay for medical? Do I get food ? When people have to start picking what’s really important for them, that’s when it gets dangerous. It will fall from the kupuna to the working class to the younger generation,” Quartero said. “It’s really scary right now.”
A bright spot, however, is that more of Hawaii’s unemployed have started to receive checks from the state Department of Labor and Industrial Relations, including those who were waiting for federal Pandemic Unemployment Assistance (PUA) funds.
On Thursday the state began distributing PUA funds, which offer support for the self-employed, independent contractors, gig economy workers and freelancers. The PUA program also might cover some people who are seeking part-time work, lack sufficient work history or otherwise don’t qualify for regular unemployment compensation or extended benefits.
Since March 1, DLIR has distributed more than $709.5 million in unemployment. Nearly $285 million of the total has come from the state unemployment insurance trust fund. The total also includes about $109.9 million in PUA funds and more than $314.7 million in “plus-up” funds made available by the CARES Act. Applicants eligible for plus- up funds temporarily get an extra $600 in weekly benefits.
“It is a staggering amount of money that we are seeing paid out, but my concern really is for those people whose claims that we are still processing,” said DLIR Director Scott Murakami during a Honolulu Star- Advertiser online COVID-19 CARE Conversation.
The department said that it has paid 126,798 claims, or nearly 75% of the claims that it has processed. Another 68,177 claims are still in process, and 43,076 have been denied.
The Pandemic Emergency Unemployment Compensation (PEUC), the federal 13-week extension to claims, also was soft-launched Monday.
Murakami said the department has made strides but likely won’t get through its backlog this month as originally anticipated.
“I don’t want to give people the illusion that come May everything will go back to normal,” Murakami said. “That’s not the case. We’re still gonna look at a number of people who are unemployed. We still have the extension programs going on.”