With the tourism industry’s restart and other economic recovery expected at a gradual pace, there’s virtually no chance that Hawaii’s highest-in-the-nation unemployment rate will fall steeply before year’s end — when streams of jobless benefits and resources from federal Coronavirus Aid, Relief and Economic Security (CARES) Act funds dry up.
Aiming to ease ongoing unemployment pain, the Hawaii Department of Labor and Industrial Relations (DLIR) this week activated extended jobless benefits that add 13 weeks more to the state’s normal 26-week coverage limit and a previous 13-week extension known as Pandemic Emergency Unemployment Compensation, which will tap out on Dec. 26.
This much-needed second extension will likely serve as a safety net for many residents who lost work before or during the pandemic. It enables sidelined workers to receive as much as a full year of unemployment compensation, compared with the previous limit of nine months.
The extended benefits program is available in states where unemployment is severe — and Hawaii is among the hardest hit. Due in large part to COVID-19’s ravaging of the tourism sector, we had the nation’s highest unemployment rate in September at 15.1%. Of the four other states topping 10% last month, visitor-reliant Nevada was second at 12.6%.
With Hawaii’s pre-travel testing program now bringing more trans-Pacific travelers here, hope flickers for lower monthly jobless rates through the rest of the year. However, as some workplaces ramp up staffing, the DLIR is not seeing a leveling off of advance-notice filings from companies, signaling that scores of layoffs or long furloughs are in the works. It’s worrisome that since early September, 60-plus companies have submitted such notices — more than double the total count for 2019.
In a recent Honolulu Star-Advertiser Spotlight Hawaii interview, state DLIR Director Anne Perreira-Eustaquio said: “We’re still seeing a large amount of individuals now being permanently laid off” as well as “businesses who have hung on for all this time … starting to lay off.”
The prospect of fewer businesses means more worries tied to Hawaii’s Unemployment Compensation Trust Fund — the employer-funded pot of money that covers the state’s jobless benefits. While employers have long contributed on a quarterly basis, COVID-19’s economic fallout quickly drained the pot.
To continue cutting benefit checks, the state has so far borrowed $640 million from the U.S. Labor Department; by the year’s end, the total loan amount could climb to $1.2 billion. If employers are unable to help pay back the loan, they risk losing a valuable payroll-related federal tax credit that, in turn, could further impede business recovery. Meanwhile, DLIR’s grappling with unresolved unemployment claims drags on — meaning untenable delays for out-of-work residents.
Last week, 100 new adjudicators began working on long-standing complicated claims; and the DLIR call center’s 200 agents daily answered about 2,000 calls — but received between 8,000 to 9,000. What’s more, with demand for assistance still vastly outpacing resources, federal CARES funding, which has paid for staffing in both these efforts, runs out in December.
From early March through late September, DLIR has paid out $3.3 billion in unemployment compensation related to about 180,000 claims. Amid initial soaring rates, some antiquated technology was upgraded and new staffers hired. But of more than 85 hires, about one-third have quit.
“It’s tough. It’s hard on the heart,” Perreira-Eustaquio said of the work. In addition to know-how about labor rules, staffers talk with claimants, some rightly frustrated by months of wait to untangle snags.
Still, the work must continue. In response to Hawaii’s employee-employer plight, lawmakers and others mapping our recovery must redouble pushes to secure funding and resources for DLIR and to stimulate the state’s ravaged economy.