Posted on: Sunday, May 19, 2002

Census confirms huge job shift

•	Special report: Hawai'i Census 2000

By Susan Hooper
Advertiser Staff Writer

In 1992 Terry Gerber traded the relative safety of a stockbroker's job with Prudential Securities in Honolulu for the seat-of-the-pants life of a small-business owner.

Advertiser library photo • Aug. 1, 2001

Workers in Hawai'i, according to the 2000 census, moved from jobs at large companies in industries such as agriculture, top, to being self-employed, as Terry Gerber, above, did in becoming owner of the Flavormania ice cream shop in Hale'iwa. Gregory Yamamoto • The Honolulu Advertiser

Ten years later, he is the owner and sole employee of Flavormania, an ice cream parlor in the Hale'iwa Shopping Plaza.

At age 63, he works 11 hours a day, seven days a week dishing up frozen treats to his sunburned customers. Gerber says an "independent streak" led him to choose the uncertainties of self-employment, but he realizes that in recent years other Hawai'i workers have had the decision made for them.

"There's a trend going on for years around the country to get rid of full-time, permanent employees and replace them sometimes with the same people as consultants, part-timers, this or that, to reduce the benefits packages," Gerber said. "So you've got a lot of people out there who are independent contractors who used to be middle-management or upper-management type people."

In Hawai'i, Gerber said, "as places closed, you've got the guys that used to work for Dole that are now doing a little farm work themselves or coming back to Dole as contract workers. ... A lot of jobs just got eliminated ... nevermore to come back. So you've got these people who say: 'Well, we want to stay in Hawai'i; what are we going to do? Let's get together and pool our money and open a business — but the turnover is huge."

The transition thousands of workers like Gerber have made from employee to entrepreneur is just one of several trends in Hawai'i labor and employment found in the latest 2000 census data released last week. The data includes a wealth of information on income, employment patterns by industry and changes in the labor force since 1990.

The numbers in virtually every category reveal the effects of Hawai'i's economic torpor, which lasted the better part of the decade. But there are a few faint bright spots, analysts say, including a 4.6 percent increase in the civilian labor force and a 9.3 percent rise in the state's population.

"When you have that going on, that tends to say people see some opportunities here or that it's a pleasant place to live and they're going to come here," said Lawrence Boyd, labor economist with the Center for Labor Education and Research at the University of Hawai'i-West O'ahu.

"There was a question about this during the 1990s, because the Census Bureau estimates were showing a decline in the population," he said. "But that's the news here: The census is showing an increase in population during the 10 years. ... People thought there was a net out-migration from Hawai'i, and these numbers indicate that that was not the case."

Going it alone

Analysts are quick to point out that a number of demographic and other factors are responsible for the census figures, and they caution against drawing hasty conclusions.

Nevertheless, the data show that for many Hawai'i workers in the 1990s, traditional employment opportunities shrank and salary increases failed to keep pace with inflation.

The shift to self-employment — voluntary or otherwise — shows in the census data on classes of workers. In 1990 Hawai'i had 385,061 privately employed wage and salary workers — 72.8 percent of civilian employees. Self-employed workers that year accounted for 6.5 percent of the civilian work force, or 34,291 people.

By 2000 those categories had shifted. There were 381,606 private wage and salary workers, or

70.9 percent of all civilian workers. Self-employed workers had risen to 7.6 percent of the civilian work force, or 41,109 people.

Looking at the numbers another way, the number of private-sector wage and salary workers dropped 0.9 percent between 1990 and 2000, while the number of self-employed rose by 19.9 percent.

"The increase in the number of self-employed is one of the things we have seen over the past few years," said state economist Pearl Imada Iboshi, who is with the Department of Business, Economic Development and Tourism.

"A lot had to do with the construction industry, but we've also seen it in the services sector as well. And I think over the past few years it has really been an overall trend. I think in Hawai'i we actually had a smaller share of self-employed in many fields, including construction, but over time we've become much more similar to the U.S. as a whole in terms of self-employed in various occupations."

Disappearing acts

The past decade saw changes in a number of industries in Hawai'i. And many were the result of offshore pressures on the state's economy.

During the 10-year period, the sugar industry responded to stiff competition from foreign countries with lower labor costs by closing plantations statewide. The percentage of workers in agriculture, forestry, fisheries and mining was 3.2 percent of all civilian workers in 1990. Ten years later, that percentage had dropped to 2.3 percent. That's a drop from 16,832 to 12,119 workers.

The number of manufacturing workers also slipped, largely because of the loss of sugar- and pineapple-processing jobs. Manufacturing in 1990 employed 6.1 percent of all civilian workers, or 32,348 people. By 2000 manufacturing's share had dropped to 3.5 percent of all civilian workers, or 18,979 people.

The loss of Japanese investment dollars when that country's bubble economy burst in 1991 helped contribute to a decline in construction workers during the decade, from 8 percent to 6 percent of all civilian workers in the state. Census takers counted 32,180 construction workers in Hawai'i in April 2000, down from 42,071 in 1990.

With all the uncertainty in the private sector, government work offered a comparative haven, the census numbers suggest. Public administration jobs saw stability over the decade, accounting for 8.1 percent of the civilian work force in both 1990 and 10 years later. In 2000, there were 43,711 public-administration workers, up less than 2 percent from 42,950 in 1990, according to the census.

A key measure of the health of any labor market is the unemployment rate, which is the percentage of the civilian labor force out of work but still looking for employment. According to the census figures, the unemployment rate in 1990 was 3.5 percent — a sign of a particularly strong economy.

In 2000, according to the census, that rate had increased to 6.3 percent.

In 1990, the census data shows, 19,288 people were out of work. Ten years later, the number of people without jobs in Hawai'i had nearly doubled, to 35,886 people.

Several local economists, however, took issue with the Census Bureau's unemployment rate for 2000, saying it seemed too high for a year in which the economy was showing strong signs of recovery.

"I wouldn't have expected the year 2000 would have been quite as bad a year as it was from the unemployment number," said Leroy Laney, professor of economics and finance at Hawai'i Pacific University's School of Business Administration.

By comparison, Boyd said, the federal Bureau of Labor Statistics' Hawai'i unemployment rate for April 2000 — the month when census data was gathered — was 4.4 percent.

"That gets back to the whole debate — how accurate and viable a count is the census, and is there a better survey methodology," Boyd said.

Limited opportunities

Notwithstanding the controversy over the 2000 unemployment rate, other measures of employment in the census data also show a shift in employment trends over the 10-year period.

Although there were increases in both the civilian labor force and the state population between 1990 and 2000, the labor force participation rate declined from 64 percent to 60 percent during that time, Boyd said.

The labor force participation rate is a ratio of the civilian labor force to the population over 16 — that is, the percentage of people over 16 who are working or looking for work.

A decline in that rate could be caused by a higher number of retirees in the population, Boyd said.

"The population is aging, and as it's aging more people get out of the labor force," he said.

Census population data bears out his theory. In 1990 there were 124,677 people age 65 and older living in Hawai'i, or 11.3 percent of the population.

In 2000 there were 160,601 people 65 and over in the state, or 13.3 percent of the population.

To put it another way, the number of people age 65 and older in Hawai'i increased by nearly 30 percent between 1990 and 2000, while the total population increased by just under 10 percent.

Boyd points to another possible reason for the decline in the labor force participation rate in the past decade: a feeling by those in the labor force that employment opportunities in Hawai'i were fewer and less lucrative.

"If people have a perception that the unemployment rate is declining and they have a chance of getting a job, they'll come back into the labor force ... if they don't see that potential, they'll go out," Boyd said.

Treading water

The census data also measured growth during the 1989 to 1999 period in male and female median income, per capita (per person) income, and median household income.

Without adjusting for inflation, incomes in all categories showed gains. But inflation — the increase in the cost of consumer goods, services and housing — was about 35 percent in the state over the 10-year period, according to the state Department of Business, Economic Development and Tourism.

When the census data incomes are adjusted for inflation, at the end of 10 years they have either declined or stayed flat in all categories except women's median income. In other words, many workers' purchasing power either stayed the same or declined slightly between 1989 and 1999.

Laney said the stagnant incomes over the decade mirror the travails of Hawai'i's economy.

"We didn't have such a great decade," he said. "There were some years of recession and other years of very little growth that were unprecedented for Hawai'i since statehood. So you wouldn't expect very much of an increase (in income)."

One bright spot in the income figures is women's salaries. Inflation-adjusted women's median income grew by 5.6 percent from 1989 to 1999, compared with an anemic 1.3 percent increase in per-capita income, and women also made gains in closing the historic wage gap with men.

Using figures not adjusted for inflation, men's median income in Hawai'i rose 31 percent between 1989 and 1999. Women's median income, by comparison, rose 42 percent.

The gains reflect in part the greater variety of jobs open to women, said Imada Iboshi, economic research administrator with the state business department's research and economic analysis division.

"I think there are more opportunities for women in various areas than there were 10 years ago," she said.

A rough 10 years

As they reviewed the census data, several local economists said that when comparing the beginning and end of the past decade, it is important to keep in mind the circumstances of Hawai'i's economy in 1990.

The state was in an unprecedented boom fueled by billions of dollars in foreign investment, largely from Japan. Construction workers were busy building luxury hotels and Kahala mansions. Labor was in demand and jobs were plentiful. As a result, the numbers the census captured during that year represent a tough act to follow — especially when the next year measured, 2000, came after a lengthy economic slump.

"The census captures just a point in time, and 1990 was a very strong year for Hawai'i," said Imada Iboshi.

Boyd has another historical context for the most recent census figures.

Inflation-adjusted per-capita income data from 1940 on shows that Hawai'i has had other lengthy periods of economic stagnation, Boyd said, including 1945 to 1958 and 1974 to 1983.

"Since 1940 we've alternated extremely good decades with bad decades," he said. "This last decade ... was a pretty bad decade."

Reach Susan Hooper at 525-8064 or shooper@honoluluadvertiser.com.

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* Workers in restaurants and bars were removed from this category in 1997.

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** Percentage of total population 16 years and older

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