Worst case could
be 17,000 job losses

State economist says current
situation worse than Gulf War

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By Lyn Danninger
ldanninger@starbulletin.com

The state is facing its worst economic crisis ever, a state economist told a legislative pane l yesterday.

State Department of Business, Economic Development and Tourism Director, Seiji Naya told a meeting of social services providers and legislators at the Capitol.

Naya said there are three possible macroeconomic scenarios based on data he is receiving from the tourism industry and state tallies.

"I think we are facing an even more serious economic crisis in Hawaii. I can't recall anything worse than this," Naya said.

With Hawaii experiencing around 70 percent to 80 percent of its normal visitor count, job losses are finally beginning to stabilize. But there's still a long way to go, he said.

The number of unemployment claims, although slowing, will continue to be higher than normal in the immediate future, Naya predicted.

Even a 13 percent decline in visitor arrivals, such as during the Gulf War, translates into losses of around $500 million and 11,000 jobs.

Hawaii has already passed that point, Naya said.

Based on a 20 percent decline in arrivals between September and the end of the year, the loss of income to the state would be around $725 million and about 17,000 job losses, Naya said.

But the worst-case scenario -- a 30 percent decline in visitors between September and year-end -- would translate into a $1 billion loss of income for the state and around 25,000 jobs, or 8 percent of the state's work force.

Naya also said he has a growing concern about the high numbers of those unemployed -- perhaps as many as 65 percent -- who have no health insurance.

Naya detailed various proposals that are part of Gov. Ben Cayetano's economic stimulus package that will be presented to legislators next week. Those proposals include about $1 billion in capital improvement construction and repairs mostly slated for education-related projects, the creation of a limited health insurance benefits program, a 13-week extension of unemployment benefits and extensions of general excise tax payments for businesses.