If you were expecting dramatic results in the 2021 legislative session, you may be a bit disappointed because the session largely failed to address the critical economic issues facing our state, particularly diversification of our economy and getting the unemployed off the bench.
Sadly, none of the bills that leadership chose to be heard would diversify Hawaii’s battered economy, create jobs or foster resiliency, all necessary components for the economic recovery so critical after the pandemic. Hawaii continues to have the highest rate of unemployment in the nation and the highest cost of living.
Focused on budget deficits from the pandemic economy, bills that are still alive offer new taxes and fees for everything from rental cars to ocean tours, treating the visitor industry as low-hanging fruit and ignoring the impact that cost increases will have on struggling local businesses and residents.
For example, rental vehicles on Maui cost between $800 and $900 per day, and the state appears as awkward in getting out of the pandemic as it was slow to adjust to getting into the pandemic in March 2020. The federal bailout removed all the red ink in state government for the time being, but big debts in the billions loom ahead.
Legislators have been slow if not dumb to respond to the danger signs in our economy that have been looming for decades but catalyzed by the pandemic. Legislation needs to be advancing innovative solutions, streamlining cumbersome bureaucracy and creating business-friendly incentives or wooing new industry to the islands.
Case in point, Loves Bakery should have never collapsed the way it did and should have been thrown a lifeline before it threw in the towel. The Legislature saved Hawaiian Airlines in the 1990s with a loan guarantee, so we could have also saved Loves if our elected officials were just a bit more innovative and creative and enterprising in their thinking. (Hawaii is not listed as the “least friendly place to do business in the nation” for no reason.)
Meaningful legislation should target growing the economy instead of growing the government — that is, making the pie bigger, not just cutting it up in smaller pieces, which is the default economic policy of this administration.
Unfortunately, the pie just keeps getting smaller and smaller, and the pandemic has been a good wake-up call to the failure of our economic policies.
Put simply, the size of Hawaii’s economy does not fit the needs of its population. It’s like a father with eight kids with a salary that can only feed three of his kids well, three other kids are on rations and the last two kids survive by government programs and food stamps.
This Hawaii father never thinks of getting job retraining or a new higher paying job, he simply keeps cutting back on providing for his kids. That’s the story of Hawaii’s economy and the many families that are struggling just to stay afloat.
For sure Hawaii’s unemployed and small businesses have borne the brunt of the economic decline with up to 40% of businesses not being able to open again after the pandemic, according to some recent surveys. Commercial vacancies are also expected to peak in the third quarter of 2021, representing a 20-year high, according to CBRE.
April’s unemployment figures indicate that Hawaii has 17,700 fewer jobs than it had prior to the pandemic. But improving unemployment figures do not tell the entire story.
Back to our Hawaii family with eight kids: over 42% of Hawaii’s residents were just making ends meet prior to the pandemic, according to a study by Aloha United Way, and 33% were just above the poverty line. Most Hawaii families report working multiple jobs to make ends meet and multiple generations living under one roof to afford housing.
These families are called “asset limited, income constrained employed,” or ALICE families, living paycheck to paycheck with no cushion for emergencies. Their numbers have doubtlessly increased in number with the shutdowns.
The University of Hawaii Economic Research Office points out that though the numbers have improved for unemployment, the number of people who are underemployed brings the total closer to 19% of our workforce sitting idle on the sidelines of our economy.
Some have introduced bills to bring Hawaii more films and TV series so we can slowly become “The Hollywood of the Pacific” with numerous high-paying jobs. Ditto, commercial agriculture, space tourism, national sports as well as Hawaii being a center for conflict resolution as the “Geneva of the Pacific.”
The point is that we need targeted legislation to support the local economy instead of wasting legislative efforts on such things as “Declaring 2022 as the Year of the Limu” (SCR135) or making releasing helium balloons as birthday/graduation crimes (SB347). Imagine that: Politicians legislating hot air!
Yes, we can be more entrepreneurial and create higher-paying jobs. We just have to stop living off our good looks and start using our brains.
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Originally Appeared On: https://www.civilbeat.org/2021/04/we-need-targeted-legislation-to-support-the-local-economy/