Downward spirals are precarious phenomena — not just because of the hapless elements being sucked down, but also for the dangerous momentum that can be difficult to pull out of.
So the recent trend of Hawaii’s declining population is worrisome, an outlook worsened by the coronavirus pandemic that has decimated Hawaii’s economy and jobs outlook.
In a recent blog report, University of Hawaii Economic Research Organization (UHERO) economists projected that the state will see a net population loss of 19,000 over the next two years, on top of a 2,000 loss by the end of this year. It would be an unprecedented wave of residents forced or opting out of Hawaii, spurred largely by the ravaged economy.
Hawaii’s job prospects today are dire indeed, after a half-year standstill of tourism and business brought a spiral of closures among retailers, restaurants and others. UHERO projects that the number of nonfarm jobs here will fall by 90,800 this year to 565,300, and that by 2023 there still will be 29,200 fewer jobs than last year.
While some residents might initially celebrate the out-migration forecast — lamenting traffic congestion, overdevelopment or overcrowded beaches — there is real reason for worry. Among other things, sustained population loss reduces human capital and retards economic growth.
Some 70% of Hawaii’s economy is driven by consumer spending. Fewer residents means less spending, smaller tax bases for city and state coffers, and overall revenue losses. Further, Hawaii needs a robust middle-class with disposable income to feed the hungry economy, and to contribute to societal vibrancy. A stark society of “haves” and “have-nots” will not do.
Unfortunately, though, as noted by UHERO researchers James Mak and Justin Tyndall: “The mainland has become a more attractive place to live for many Hawaii residents, while Hawaii has become less attractive for potential mainland in-migrants.”
Hawaii’s population has fallen for three straight years since 2017, dropping 4,721 from July 2018 to July 2019. Mak and Tyndall said more locals have been leaving due to the high cost of living — especially housing — plus lack of job opportunities suited to their skills and interests.
The “brain drain” is a chronic concern, where Hawaii-grown talent leave for better career prospects elsewhere. Now, in addition, the pandemic-constriction of viable jobs here will push out more residents — ranging from white-collar to service-oriented workers.
That’s why trans-Pacific travel needs to reopen on Oct. 15, purposefully and carefully to balance coronavirus health risks. And the kamaaina economy must continue to reopen and be buoyed by government, so jobs can flourish.
Beyond tourism, creating new and viable economic shoots for Hawaii has long been discussed but scantly realized. If ever there was a time for government to step up with action plans for Hawaii’s renewal, it is now.
Early in the pandemic response in April, Gov. David Ige vowed that a $10 million “Navigator” initiative would help guide economic recovery from COVID, appointing former HECO executive Alan Oshima to helm the effort. The Navigator’s murky mission, though, led legislators to reject outright funding — and Oshima is now pursuing a $3 million federal grant through 2022 to realize the final phase of the plan: resilience or “Hawaii 2.0.” The goal, Oshima said Tuesday, “is to arrive at a community-based plan that will guide our state in economic transformation.”
We’ve heard it before, but the stakes have never been higher. A depleted economic landscape now lies before us, in need of regrowth and regeneration. There is great opportunity for meaningful reset, and we can’t afford to be sluggish and allow the exodus of homegrown talent and skills. Many of those being priced out of Hawaii are our keiki o ka aina. Many would be able and willing to stay, if only the work materialized — the now-dormant jobs as well as diversified new ones.