With economists predicting short-term unemployment rates as high as 25 percent, the economic impact of the coronavirus pandemic will dwarf the Great Recession.
Hawaii’s non-military workforce is around 660,000 people. Beth Giesting, with the Hawaii Budget and Policy Center, thinks around 200,000 jobs may be at risk during the COVID-19 downturn.
That equates to roughly 30% of the non-agricultural jobs in the state.
In the Great Recession, Hawaii lost 44,000 jobs. According to state Labor Director Scott Murakami, a single day in March saw 20,000 new claims for unemployment insurance.
Total claims for the month of March soared to more than 160,000.
In the COVID-19 crisis, Beth Giesting says certain industries will be hit harder than others.
“Accommodations and food services will be severely affected. Retail, other than food, drugs, and gasoline, all of those are essentially closed. Air and visitor transportation, arts and entertainment, social services and child day care are seriously affected right now,” Giesting said.
According to the Hawaii Budget and Policy Center’s 2019 Recession in Review report, many of those sectors were hurt during the last recession. Hospitality, transportation, and retail accounted for half of all job losses during the down turn following the 2008 financial crisis.
Construction and professional services were also hit hard during that event. The longer the coronavirus recession lasts, the more likely they are to be impacted again.
“It clearly is going to affect everyone,” Giesting said. “It would be a mistake to say that some sectors are going to be fine. I think everyone is going to be impacted.”
But there is some good news. According to Giesting, the $2 trillion federal government rescue package was approved in record time.
“Certainly we never saw a couple of substantive bills come out of Congress this quickly during the Great Recession. This is almost lighting speed for government action,” she noted.
According to the Wall Street Journal, less than 100 days after the first novel coronal virus death in China, Congress had passed 3 stimulus packages.
In the 2007 financial crisis, it took Congress almost 200 days to approve an initial round of stimulus legislation.
As job losses climb to more than 10 million, it remains to be seen whether that action will be sufficient.