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Jobless rates on Molokai and Lanai still higher than a year ago

Economist, points out unemployment has fluctuated on islands in the past

Hiro’s Ohana Grill on Molokai, like the rest of the state, has been having a hard time recruiting workers. While unemployment rates on other islands have been trending down since the pandemic, Molokai and Lanai have recently been seeing higher rates than a year ago. A University of Hawaii economist, however, said he didn’t think people should “attribute too much meaning” to the fluctuation. — Photo courtesy of Hiro’s Ohana Grill

Like many businesses, Hiro’s Ohana Grill on Molokai has struggled to recruit workers as people slowly head back to work amid the COVID-19 pandemic.

“In the past year we have been having a hard time recruiting workers like the rest of the nation,” said Cameron Hiro, general manager of Hiro’s Ohana Grill. “It has caused some hardship in our restaurant where managers end up working a lot of hours to cover shifts at times. In worst case scenarios, we end up closing early or limiting our hours.”

Across the channel on Lanai, one of the island’s largest employers faces similar issues of short-staffing and recruiting woes.

“Being located on Lanai with a smaller pool of applicants adds to the challenge,” said Pulama Lanai. “As we continue to emerge from the pandemic, we hope that the unemployment rate will stabilize and that we are able to hire qualified individuals to join our team.”

As the economy recovers and unemployment rates on some islands have fallen to nearly half what they were a year ago, Molokai and Lanai are seeing the opposite trend in recent months, with jobless rates up compared to the same time last year. But one University of Hawaii economist isn’t putting too much stock in the numbers, based on how rates have fluctuated on both islands in the past.

“Economic conditions typically do not suddenly shift every month, rather they follow slower cyclical patterns,” said Peter Fuleky, an associate professor of economics with UH’s Department of Economics and the UH Economic Research Organization known as UHERO.

In March, Maui and the rest of the state saw unemployment numbers drop from March 2021, when more COVID-19 restrictions were in place. Maui island’s unemployment rate was 4.2 percent, down from 8.2 percent in March 2021, according to state Department of Business, Economic Development & Tourism data.

Rates also fell from 8.8 percent to 4.6 percent in Kauai County, from 5.6 percent to 3.3 percent in Hawaii County and from 5.3 percent to 3.2 percent on Oahu.

Meanwhile Molokai’s unemployment rate for March was 7.1 percent, up from 4.2 percent in March 2021, while on Lanai, the rate was 5 percent in March, up from 3.1 percent in March 2021.

(The rates are not seasonally adjusted, meaning they did not take into account the hiring and layoff patterns that go along with the winter holiday and summer vacation seasons.)

Fuleky said he doesn’t think people should “attribute too much meaning” to the recent fluctuations and that there is not a really good explanation for it.

He pointed out that similar things have occurred prior to the pandemic. For example, the unemployment rate on Molokai between March 2016 and March 2017 fluctuated between 10.5 percent and 2.1 percent, according to seasonally adjusted figures by UHERO. Compare that with the experience last year, when the unemployment rate between March 2021 and March 2022 fluctuated between 9.1 percent and 4.5 percent, Fuleky said.

Although the most recent fluctuation is less than five years ago, Fuleky said it is in the range of historical “noise,” or random variation in the data.

“I don’t think we should attribute too much meaning to brief fluctuations within this range,” he said, adding that similar comparisons could be found for Lanai.

Fuleky also showed another example of fluctuations in data for Molokai. In seasonally adjusted data for Molokai, the unemployment rate went from 6 percent in August 2021 to 10 percent in November of that year, then to 6 percent in January 2022 and 9 percent in March 2022. He said the rates were “hard to believe.”

“But if you hear about large business closures in one month and reopening in the next, I guess it could be possible,” he said.

Fuleky said that a fundamental driver behind the unemployment rate is economic conditions and that unemployment rates should be fluctuating inversely with economic conditions — when economic conditions are good, unemployment rates are low, and vice-versa.

Economic recovery has looked different for every county: Kauai and Maui counties were hit the hardest, with unemployment surpassing 20 percent during the early months of the global crisis, according to state labor data. As people headed back to work, Kauai’s and Maui’s unemployment rates fell more sharply than on Molokai, whose economy is based less on tourism and had typically had higher jobless rates than the rest of the state before the pandemic.

Lanai, which also saw staggeringly high unemployment at times in the pandemic — once reaching 29.3 percent in November 2020 — fell to 5.9 percent in December 2020 and experienced much lower rates in 2021.

On Molokai and Lanai, some businesses are reporting the same need for workers as companies on Maui and across the state, though they weren’t in extreme distress and without workers.

Hiro said the grill has about 35 employees, but workers are slowly being hired and “we just have enough for now.” He estimated that having another three to four workers “would do it.”

“Although recently we have noticed more people are showing interest in working at the restaurant especially since we have gotten busier in the last several months,” he said.

At Misaki’s on Molokai, the grocery store has “been looking for workers for a while,” said Kevin Misaki.

In the early stages of the pandemic when unemployment benefits rose above normal levels, Misaki said there was talk in the community about how it was easier to collect an unemployment check than to work, so the extra benefits may have contributed to the struggle to find employees at that time.

But now that the increased benefits have stopped, Misaki said he’s not sure what is causing the lack of workers.

He said cutting back the store’s hours also has helped ease the pain of the worker shortage. If he had around five more staff members, that would help, he said.

On Lanai, the largest employers, Pulama Lanai and Four Seasons Resort, also report similar issues in finding workers.

“We can’t speak to the unemployment numbers, but we are facing the same staff shortages many other companies in Hawaii are experiencing; we have a number of open positions available and are continuing to work to fill them,” Pulama Lanai said in a statement.

Lori Holland, a spokeswoman for Four Seasons Resorts Lanai, said that all of its services are available to guests.

But, “of course there is currently a global staffing challenge in many industries and Lanai is no different, but we continue to welcome and extend our hospitality to our guests,” Holland said.

* Melissa Tanji can be reached at mtanji@mauinews.com. Managing Editor Colleen Uechi contributed to this report.

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