Bailout or not, the Hawaii economy worsens

As Congress pointed fingers and Wall Street melted down in recent weeks, Hawaii hotel occupancy figures continued to fall and industry experts bemoaned the slowing economy, fuel prices and the cratering of personal wealth that is keeping people closer to home, not on Hawaii vacations.

If tourism is the engine driving the local economy, that engine is sputtering. Hotel occupancy statewide dropped 8.1 percent in July with only 74.2 percent of rooms in use. At the same time, room rates slipped 0.8 percent in what has been a busy season.

Sadly, 10,750 more Hawaii workers were unemployed in August compared to 2007, a total of 28,100. That's an increase of 62 percent compared to last year's 17,350 jobless. Many of the 2,800 jobs lost in the trade, transportation and utilities sector were credited to the departure of a cruise ship. Meanwhile, the leisure and hospitality sector lost 1,700 jobs year-over-year.

The Hawaii Council on Revenues met in early September, but decided to stand by its forecast of 1 percent annual growth for state tax revenues this fiscal year, which is half of its May prediction of 2 percent. The council said little has changed in August to require a change in the forecast, but that predates the more recent investment bank crisis.

Four so-called “mass layoffs” in Hawaii in August resulted in the loss of 408 jobs for at least 31 days. This followed four such layoffs in July resulting in the loss of 271 jobs. The U.S. Department of Labor defines mass layoffs as 50 or more initial claims for unemployment insurance benefits from one employer during a five-week period, with at least 50 workers separated for more than 30 days.