Erina Peters, a single mother who has lived in Hawaii since she was 3, packed her bags and made the difficult decision to move to Nevada in mid-February.
The worsening pandemic and its ripple effect on the tourism industry, on which her two jobs depended, threatened her livelihood, she said. It wasn’t going to be worth “killing yourself to try to survive in a place that was already charging the locals”.
The exorbitant cost of living had already made him consider moving even before COVID-19 reached Hawaii’s shores, Peters said. “There was never a chance to breathe, never a chance to try to move on and save for a house for my daughter, but never a chance to live,” she said. declared.
Then it became clear that the virus was not just going to kill people, but also jobs.
“My industry is dead,” said Peters, who worked as a timeshare and bartender in Hawaii.
The cost of living and economic hardship have always been among the top reasons that keep residents away from Hawaii. The state’s population has shrunk for three straight years, which economists and demographers say is a sign of economic and social ills, and the continuation of the pandemic should only amplify the problems causing people to leave Hawaii.
COVID-19 has sickened and killed, closed businesses and deprived people of their jobs. These are crippled industries — especially the tourism and hospitality industries here, which employ large numbers of Hawaii residents. Hawaii’s strength over the years has been the relatively low unemployment rate, but the pandemic has changed that reality – it rose from 2.7% in January to 22.3% in April after the introduction of unemployment measures. ’emergency stop.
If this virus persists — or worsens as seems possible with the surge that began in late July — it could lead to a greater exodus from Hawaii, said Justin Tyndall, assistant professor of economics at the University of Hawaii Economic Research Organization.
And when a state’s population decreases, it negatively affects the economy because fewer people mean a smaller workforce, less tax revenue, and lower household spending.
“The virus seemed relatively under control,” he said. “More recently, that doesn’t seem so true. So if this continues, we will see an economy lagging behind other states.
It’s worrying, he said. While it’s difficult to gauge how COVID-19 might affect migration – and therefore the economy – in the immediate future, we need to keep an eye on what might happen in the long term.
And probably it could be that more people are choosing to leave, which would then make things worse for the economy – it’s cyclical. People move because it’s a hard place to make a living and because of that the place loses money and becomes a harder place to make a living so more people move because it has become a more difficult place to earn a living.
US Census data shows Hawaii was already losing population long before unemployment rates soared due to the pandemic – for three consecutive years since 2016. Between 2018 and 2019, Hawaii was one of 10 States to lose population, Data search by UHERO which Tyndall co-wrote showed. The state’s loss was about 4,700 that year.
Keep in mind, though: a net loss of 4,700 doesn’t mean there are 4,700 left. Population is calculated based on people moving in and out, to and from elsewhere in the country and abroad, and people dying and being born.
Between 2017 and 2018, Hawaii had a net loss of 3,800 and the year before about 3,200. Those seem like small numbers, but the continuing decline still worries economists.
“I think this trend will continue in the future,” said chief economist Eugene Tian. People will continue to leave the state because the causes of population decline are long-standing issues, including the high cost of living in Hawaii, especially the cost of housing.
The population was already in decline when unemployment rates were in the single digits. A 2018 Washington Post article noted that the unemployment rate in Hawaii was then 2%, but the population was declining. He asked, why would people want to leave a place with record unemployment?
The hypothesis of the article: house prices, which brings us back to, you guessed it, the cost of living.
These days unemployment rates look quite different and not in a good way. In August, it was 12.5%, according to the state Department of Labor and Industrial Relations. The previous month, it was 13.1%. It was even worse in May, at 23.5%.
That’s definitely not going to help matters, in terms of keeping people around. House prices and rents are still unaffordable and the unemployment rate is higher while there are fewer jobs available? Not a winning combination.
“While the job market is struggling everywhere, Hawaii has seen a bigger decline in employment compared to where people are likely to consider moving,” said Tyndall of UHERO, like California and Nevada. “I think a lot will depend on the rate of labor market recovery in Hawai’i compared to other states.”
How does all this translate into money? There are no neat, neat ways to exactly measure the value of people leaving, but there is data that can give us an idea.
One is to use the Internal Revenue Service’s Migration Earnings Statistics, which tracks the movement of individuals from one place to another and their adjusted gross income based on their 1040 forms. If you are a taxpaying citizen, you or a member of your family have surely filled out one of these forms.
Between 2017 and 2018, which is the latest data available, Hawaii lost approximately $34.4 million in adjusted gross income. This was calculated based on approximately 26,400 in-state tax returns and 29,600 out-of-state tax returns.
Thirty-something million doesn’t sound so bad in the grand scheme of a state’s wealth. But let’s dive deeper into the data. If we look at the city and county of Honolulu separately, they lost about $219 million. The other counties helped make up for his loss. So people were moving away from Honolulu, but the other counties actually grew in population, at least between 2017 and 2018, according to this data.
The previous year, between 2016 and 2017, the net loss in adjusted gross revenue for the state was approximately $271.5 million. Again, the story is the same: the City and County of Honolulu lost $513.5 million and the other counties partially made up for the loss. Hawaii County had the highest gain of $144.3 million.
In December 2019, the Ministry of Business, Economic Development and Tourism issued a study on migration flows from Hawaii which looked, in part, at continued decline. The study found that of people who left the state between 2013 and 2017, 20.5% moved to California, followed by 7.6% to Nevada and 6.9% to Texas.
Tian, the state’s chief economist, says he actually thinks there won’t be huge outflows during the pandemic, at least in the short term. The virus has imposed many restrictions on the movement of people, not only in the United States, but also in other countries. But it also means few people come either, he added.
More people are expected to continue to leave, especially with higher unemployment rates triggered by the pandemic, than can be replenished by those who come, and economic growth will be affected, Tian said. . “For Hawaiian businesses, it can be difficult to find the labor and skills they need. This will limit economic development.
Peters, who moved to Nevada in February, said people always ask her why she would leave a paradise like Hawaii.
“I don’t think anyone understands what it’s like to live in Hawaii,” she said. “Yes, it is paradise. It’s everyone’s vacation. But before all that, it’s our home,” she added.
But the house was not allowing her and her daughter to keep their heads above water, she said. Then, to make matters worse, the pandemic arrived. “Even if I wanted to go back, there’s no way I could,” she said.