Hawaii’s Low Unemployment Rate Disguises Other Problems
September 9, 2018 Written by Oralie Chapman
- Hawaii’s employers are having a difficult time filling positions with qualified employees because there are so few people looking for work. Young people are leaving the state in search of better job opportunities which is decreasing the unemployment rate but making it even harder for employers to hire employees. Check out our blog post about how to select and hire the best candidate for the job here.
- The state’s aging population is contributing to a lower-unemployment rate as people retire from the workforce but it means not enough working-aged people searching for jobs.
- Under-employed people who are working one or more part-time jobs when they would like one higher paying full-time job.
- People who have given up looking for work or chosen to go back to school because they don’t have the skills that meet employer needs.
- Employees being paid a wage that they can afford to live on – known as a “living wage.” Decades ago, wage growth was tied to productivity. The more a company made, the better they paid their employees. A change in the labor market dynamic began in the early 1980s and wage growth is no longer tied to lower unemployment or productivity. Hawaii has unique economic challenges because its economy is so heavily dependent on tourism and service jobs typically do not pay a wage high enough to match Hawaii’s high cost of housing.
Consumer spending accounts for about 70 percent of GDP. When workers are financially squeezed by low wages and skimpy benefits they have less money in their pocket to spend on consumer goods. This leads to a reduction in spending and/or an increase in debt spending which can slow the economy.
The good news for workers and the economy is that many employers are trying to handle the worker shortage by offering higher wages and more generous benefits. The question is how can businesses afford this additional spending?
What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!