A few years ago, despite having the lowest unemployment rate in the country, Hawaii was one of the few states to lose population: a situation so striking that a national newspaper described it with the headline:Hawaii has record unemployment and it’s not a frozen hellscape. Why do people leave?”
Population decline continued in the islands, but in 2020-2021 Hawaii was no longer mostly alone. It was one of 17 states and the District of Columbia with a net loss of population.
The bad news: Hawaii has lost more people than all but three other states.
That, says University of Hawaii housing economist Philip Garboden, “isn’t where we want to be.”
Peter Ho, president and CEO of Bank of Hawaii, put it more bluntly. He said Hawaii’s population decline reflects a hollowing out of the state’s middle class, which he calls “an existential economic problem for the state.”
To stay strong, Ho said, an economy needs productivity and a growing population, which leads to a larger workforce.
“You have to have one of these conditions to have a vibrant economy,” he said.
Worse, the issues driving people out of the state involve a wide range of problems, none of which are easy to solve, says Carl Bonham, executive director of the University of Hawaii’s Economic Research Organization. .
“There is no one solution,” he said. “Or we would have already tackled it.”
In absolute numbers, Hawaii’s recent population loss may not seem significant. From July 2020 to July 2021, the state lost 10,358 residents, according to the latest data from the US Census Bureau. But as a percentage of the population, it was a loss of 0.7%; only Washington, DC, New York and Illinois lost more people by percentage.
Additionally, Hawaii should have gained population as births exceeded deaths by 15,510 to 11,279 during the period, creating what should have been an increase of 4,231 people. That means about 14,500 people left the state in 2020-21.
Combine that with losses from previous years and, according to Bonham, Hawaii lost 30,000 people.
“It’s basically all the change in the workforce,” Bonham said. Hawaii’s civilian workforce numbered about 650,000 workers in November, down from 675,700 in February 2020, before the coronavirus pandemic began.
The Hawaii Department of Business, Economic Development and Tourism took a close look at the demographics of those leaving Hawaii and quantified what many people had seen anecdotally: that the best and brightest young people in Hawaii were leaving.
Inclined “Brain Drain: Characteristics of Adults Born in Hawaii on the American Mainland”, DBEDT economist Wayne Liou’s study found that kamaaina “leaving for the mainland are both younger and more educated”.
For example, the study found that nearly 15% of Hawaii-born people living on the mainland are between the ages of 18 and 44 and have a bachelor’s degree or higher, compared to 7.7% of those remaining in Hawaii. Another finding: In numbers, there are more people born in Hawaii with a bachelor’s degree or more living on the mainland than there are who have remained in the state.
“Thus, the brain drain of educated young adults of working age does not appear to be negligible,” Liou wrote.
The state government has taken steps to address the problem by creating more economic opportunities for residents. In September 2020, DBEDT Director Mike McCartney said he believed the state could create 38,000 new remote jobs in one year. To this end, the state launched the Hawaii Remote Work Projecta pilot program designed to connect Hawaii residents with out-of-state employers.
But it looks like Hawaii isn’t close to achieving McCartney’s vision. While the state clawed back some 70,000 jobs in the year after McCartney’s announcement, some 40,000 were in restaurants and lodging and another 5,000 in retail, according to UHERO data from the United States Bureau of Labor Statistics. The office does not report on remote workers as an industry.
The private sector is also mobilizing. Nicole Lim is the director of Movers and Shakasa program designed to attract, integrate and retain talented workers, especially returning kamaaina.
Lim herself is a returning kamaaina, a graduate of the Iolani School who went on to earn degrees from Yale and the Wharton School at the University of Pennsylvania before working as a management consultant and senior executive for eBay.
Lim had given up corporate life and was traveling the world teaching yoga and undergoing leadership training when his mother cut short a trip to Patagonia and ‘voluntarily told’ him to come home as Covid-19 engulfed the planet.
“When your mom purposely tells you to come home in the middle of a pandemic, you’re kind of like, ‘OK, I guess I’m coming home,'” she said.
Lim landed the job of director of Movers and Shakas after writing an opinion piece expressing reservations about the initial orientation of the program on recruiting people from elsewhere to work remotely in Hawaii.
The very existence of Movers and Shakas shows how concerned Hawaii’s business elite are about the state’s loss of population. The parent company of the organization is the Hawaii Executive Collaboration, a business organization chaired by Hawaiian entrepreneur Duane Kurisu, whose businesses include magazines like Hawaii Business and Honolulu, radio stations and restaurants in Honolulu and San Jose. He is also a minority owner of the San Francisco Giants baseball team.
Other members of the collaboration’s board of directors are Micah Kane, president of the Hawaii Community Foundation; John Dean, Chairman Emeritus of Central Pacific Financial Corp; and Ray Vara, CEO of Hawaii Pacific Health.
Since taking office, Lim has reshaped Movers and Shakas in key ways. The organization’s flagship 30-day program, the Cohort Fellow Program, for remote workers, now specifically seeks to connect with returning kamaaina.
Movers and Shakas will soon launch another initiative called the Hawaii Talent Onboarding Program. The goal is to help talented newcomers adapt to Hawaii’s unique culture and avoid leaving after a few years. As Lim describes, this is partly practical, to avoid employee turnover that is costly and frustrating for companies that need to recruit talent from elsewhere. But Lim’s vision is deeper.
“The overall goal is really brain gain,” she said. “How to Connect People in Hawaii for Hawaii’s Good.”
With only 50 scholars per cohort, Movers and Shakas won’t compensate for the thousands of people who flee Hawaii each year. But Lim said the organization’s fellows will contribute to the community.
“It’s really about finding needle movers that can have a big impact,” she said.
And as Bank of Hawaii’s Ho described, the type of people Movers and Shakas are targeting — talented, productive workers — are critical to Hawaii’s economy.
While healthy retirees moving to the state and buying real estate boost Hawaii’s economy, Ho said, they’re not the same young people moving here, starting businesses, raising families. and do community service.
“The middle class is really punching above its weight economically,” he said.
“Hawaii’s Changing Economy» is supported by a grant from the Hawaii Community Foundation as part of its CHANGE Framework project.