If you were expecting dramatic results in the 2021 legislature, you may be a little disappointed because the session largely failed to address the critical economic issues facing our state, particularly diversifying our economy and lifting the unemployed off the bank .
Unfortunately, none of the bills the leadership wanted to hear would diversify Hawaii‘s struggling economy, create jobs or promote resilience, all necessary components for the economic recovery so critical post-pandemic. Hawaii continues to have the highest unemployment rate in the country and the highest cost of living.
The ongoing bills, which focus on budget deficits stemming from the pandemic economy, offer new taxes and fees on everything from rental cars to ocean tours, treat the visitor industry as low-hanging fruit and ignore the impact cost increases will have on struggling local businesses and Resident.
For example, rental vehicles in Maui cost between $800 and $900 per day, and the state seems clumsy as it emerges from the pandemic because it has been slow to adjust to entering the March 2020 pandemic. The federal bailout has removed all red ink from the state government for now, but it faces huge debts in the billions.
Lawmakers have been slow, if not stupid, in responding to the danger signs in our economy that have been looming for decades and are being catalyzed by the pandemic. Legislation must drive innovative solutions, streamline cumbersome bureaucracy and create business-friendly incentives or attract new industries to the islands.
Case in point: Loves Bakery should never have collapsed the way it did and should have been given a lifeline before throwing in the towel. The legislature bailed out Hawaiian Airlines in the 1990s with a loan guarantee, so we could have bailed out Loves too if our elected officials had just been a little more innovative, creative, and enterprising in their thinking. (Hawaii isn’t listed as the “least friendliest place to do business in the nation” for nothing.)
Any meaningful legislation should aim at growth of the economy, rather than growth of the government – that is, making the pie bigger, not just cutting it into smaller pieces, which is standard economic policy for this government.
Unfortunately, the pie is getting smaller and the pandemic has been a good wake-up call for the failure of our economic policies.
Simply put, the size of Hawaii’s economy does not match the needs of its people. It’s like a father of eight children on a salary that can only feed three of his children well, three other children are on rations and the last two children survive on government programs and food stamps.
This Hawaiian dad never thinks of retraining or a new, better-paying job, he simply cuts back on his kids’ supplies. This is the story of Hawaii’s economy and the many families struggling to stay afloat.
Certainly, Hawaii’s unemployed and small businesses have borne the brunt of the economic slowdown, with up to 40% of businesses unable to reopen after the pandemic, according to some recent surveys. According to CBRE, commercial vacancies are also expected to peak in the third quarter of 2021, which is a 20-year high.
April unemployment figures show Hawaii has 17,700 fewer jobs than before the pandemic. But rising unemployment doesn’t tell the whole story.
Returning to our Hawaiian family of eight children, according to a study by Aloha United Way, over 42% of pre-pandemic Hawaiians were just making ends meet, and 33% were living just above the poverty line. Most Hawaiian families report working multiple jobs to make ends meet and multiple generations living under one roof to afford housing.
These families are called “asset-constrained, income-constrained employees,” or ALICE families, who live paycheck to paycheck with no emergency cushion. Their numbers have undoubtedly multiplied with the pandemic-related shutdowns.
The University of Hawaii Economic Research Bureau points out that while the number of unemployed has improved, the number of underemployed brings the total closer to 19% of our workforce sitting idle on the fringes of our economy.
Some have introduced bills to bring more movies and TV series to Hawaii 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 becoming a center for conflict resolution known as the “Geneva of the Pacific.”
The point is that we need targeted legislation to support local economies, rather than wasting legislative effort on things like “declaring 2022 the year of Limu” (SCR135) or making it a crime to throw helium balloons at birthdays/graduations to let go (SB347 ). Imagine this: politicians enact hot air!
Yes, we can be more entrepreneurial and create better paying jobs. We just have to stop living off our good looks and start using our brains.
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