The near-collapse of Hawaii’s tourism industry, and the 22% unemployment rate that came with it, serve as jolting reminders of how much our economy depends on the visitor industry.
This perception is reinforced by the new Aloha United Way’s 2020 ALICE Report, which tracks working residents who live just north of the poverty line but are unable to keep up with the cost of living — Asset Limited, Income Constrained, Employed (ALICE).
The report was built on data gathered before the coronavirus crisis, when the economy was much stronger. Even so, the number of ALICE households grew significantly larger, up 55% from 2007 to 2018, while the number of those in poverty remained relatively flat.
The report estimated that 33% of Hawaii’s 455,138 households live at the ALICE level; 9% live in poverty.
What’s behind these numbers? Low wages. There was virtually no growth in jobs that paid a healthy living wage, the report said; only low-wage jobs increased.
The report attributed this trend in part to “the growing influence of the tourism industry on Hawaii’s economy,” which set record levels for visitor arrivals in recent years.
The report said that tourism industry workers, including hospitality, accommodation and food services, “get paid less than workers in other industries, and that wages in the hospitality sector in particular grow at a slower rate than wages in other sectors.”
And this sector of workers got hit hard. The University of Hawaii Economic Research Organization (UHERO) noted that while jobs in the accommodations/food service industry account for 21% of the state’s nongovernment workforce, they accounted for 46% of unemployment claims in April.
Of course, it would be unfair to lay all the blame on tourism, which supported 217,000 jobs in 2018, according to the ALICE report. Many tourism-industry jobs pay well, and low-wage jobs exist in other sectors. Income inequality is a growing trend nationally, and it’s hard to stop; poorer people cannot build wealth as the cost of basic necessities, especially housing, rises faster than their wages. This is especially true in high-cost Hawaii.
It’s hoped that things will improve as the state prepares to reopen to tourists by easing quarantine restrictions beginning Aug. 1. And make no mistake: It will be a welcome sight to see visitors returning to our shores. But the pandemic has demonstrated with cold efficiency what people have been saying for years: A more diversified business environment and a healthy middle class are the best antidotes for economic downturns.