Jobless rate hits
13-year low here
Economists warn that
2.9% unemployment
could translate to a
skilled-labor shortage
 |  |
The statewide jobless rate dropped to 2.9 percent last month, the lowest reading since October 1991, according to the state Department of Labor and Industrial Relations, as more and more workers found a place in Hawaii's recovering economy.
"It feels great," said Jaime Jon-Cho, a Wal-Mart marketing coordinator who was one of the 1,100 people hired recently by the new Wal-Mart/Sam's Club superstore on Keeaumoku Street.
A bar manager for years, Jon-Cho had been out of work and job hunting for nine frustrating months.
"It was really disheartening. I have a college degree in psychology, but I'm pushing 40 and was starting to worry," she said.
August's dip below the 3-percent barrier was largely due to the addition of 2,200 seasonally adjusted nonfarm jobs since July.
Public-sector employment increased by 600 jobs, mainly due to increased staffing in the public education system.
The state's trade, transportation and utilities sector added 500 jobs in August; the leisure and hospitality industry created 300 jobs; and the education and health services sector added 300 jobs.
There were 18,000 people unemployed in Hawaii in August, and 612,700 employed. The total labor force of 630,700 was a record for the state, the labor department said.
"The state's strong job market is testament to the outstanding efforts of our local businesses, who toughed it out over the years when the economy was at a standstill," said Nelson Befitel, state labor director.
August was the fourth consecutive month in which Hawaii's seasonally adjusted jobless rate was the nation's lowest. The 2.9 percent rate was a tick down from the previous month's 3 percent and a decline of 1.6 percentage points from August 2003's rate of 4.5 percent.
The state's economy has added 15,200 nonfarm jobs compared with August 2003, a gain of 2.7 percent, led by strength in tourism, construction, trade and transportation, and the food-and-beverage sector.
But while that's good news for job seekers, the shrinking unemployment rate added to growing concern that Hawaii is experiencing too much of a good thing.
"It's good and bad," said Bruce Coppa, executive director of the Pacific Resource Partnership, a program that supports unionized construction. Coppa said he is confident that there is enough labor in the state to handle the construction industry's growing needs, provided that unions step up their training efforts.
"But if a new mayor comes in and wants to build some big project, we're sunk," he added.
Sustained low joblessness poses risks to the overall economy as well, said Bank of Hawaii chief economist Paul Brewbaker.
Brewbaker said the 2.9 percent jobless rate means there is no spare labor left and that the economic recovery could stumble over a lack of human resources.
"It's ironic, but you need to be careful what you wish for," he said. "All of the safety valves have been exhausted."
Brewbaker said the high demand for labor has been a boon to an increasing number of people moving from one job to another, often for better pay.
But the addition of wage inflation to a growing list of inflationary pressures on items such as oil and construction materials raises a red flag, he said.
"If all those other pressures are complemented by a general pattern of wage increases, then you get a type of inflation that persists. Then you're in trouble," he said.
Nationally, the seasonally adjusted unemployment rate also declined by 0.1 percentage points, to 5.4 percent in August.