Posted on: Tuesday, September 21, 2004

Unemployment hits 13-year low of 2.9%

By Dan Nakaso
Advertiser Staff Writer

Hawai'i's jobless rate dropped to a 13-year low of 2.9 percent in August as the Islands posted the lowest unemployment rate in the country for the fourth straight month.

The August figures were driven by 2,200 new non-agricultural payroll jobs, on a seasonally adjusted basis, according to the state Department of Labor and Industrial Relations.

All sectors added jobs in August, but the increase was led by trade, transportation and utilities (500 new jobs); leisure and hospitality (300 jobs); educational and health services (300 jobs) and public-sector employment (600 jobs).

In all, 612,700 people in Hawai'i had jobs last month, while 18,000 remained unemployed, for a total labor force of 630,700.

While employers are hiring, many job seekers are still looking for the right position.

Ilana Goldware graduated in May with a master's degree in social welfare from the University of California at Berkeley, then moved to Hawai'i in July to be with her boyfriend, who runs his own business.

Goldware, 25, wants a full-time social work position working with elderly patients, and would prefer a job in a hospital. She still needs to pass a state test to be licensed in Hawai'i, and has been offered only temporary work so far.

"There's been some opportunities here, for sure," Goldware said. "I guess I'm being picky."

Reggie Reynolds, 40, already has two part-time jobs — as an on-call stevedore and in the catering department of a restaurant. But after more than nine years at United Parcel Service — 3 1/2 as a supervisor — Reynolds would like a supervisory position in logistics and operations.

"The market's not bad," he said. "I've had a couple of offers, but all part-time. Right now I'm noticing that a lot of companies are looking for hourly employees."

Reynolds, who is Filipino, Chinese, Hawaiian and Portuguese, would love to get back to his Neighbor Island roots and move back to Kaua'i someday.

"That's my dream," he said. "But the work is on O'ahu."

Reynolds plans to look for a full-time job today at the Job Quest job fair at the Neal Blaisdell Center, which attracted the most recruiters ever — 125 — for a fall fair.

Recruiter interest in the fair is another sign of Hawai'i's tight job market. And organizers expect 5,000 people — many of them currently employed — to be looking to move up.

"We have the lowest unemployment rate in 13 years, and (the) largest workforce in the history of the state," said Nelson Befitel, state Director of Labor and Industrial Relations.

"The state's strong job market is a testament to the outstanding efforts of our local businesses, who toughed it out over the years when the economy was at a standstill. The business community's confidence in the state's economic outlook is evident in the number of jobs being added in different sectors."

While unemployment is expected to stay low through the busy holiday season, Lawrence Boyd, a labor economist at the University of Hawai'i-West O'ahu, said rising wages will fuel inflation, which is expected to reach an annual rate of 4 percent.

"Jobs are being created faster than people are entering the labor force, and fewer people are unemployed," Boyd said. "We're already seeing wages rising, and I would expect inflation to rise. The question is, how fast will it rise?"

The last time unemployment dipped to 2.8 percent was in the 1980s, Boyd said, when inflation jumped to 8 percent — but that was caused largely by a Japanese investment boom that drove up the price of real estate.

Boyd doesn't expect inflation to rise nearly as high, but he worries about higher gasoline prices, which affect all segments of the economy.

Hawai'i's unemployment rate has been running about 2.5 percentage points below the rest of the country, which had 5.4 unemployment in August.

Much of that difference can be traced to the state's service-sector economy and relatively small labor pool, Boyd said.

Improvements in industries such as tourism and construction that add jobs quickly translate to better unemployment numbers, Boyd said.

On the Mainland, larger, manufacturing-based economies need to grow much faster to see significant job growth, Boyd said.

"If you have 4 to 5 percent growth in productivity on the Mainland," he said, "you have to have demand grow more than 4 to 5 percent to create jobs."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or at 525-8085.