How to stop the exodus

From Grassroot Institute, Oct 9, 2020

The exodus has begun. 

Or, more accurately, the exodus continues and is likely to get worse.

Over the past few days, Hawaii News Now, the Honolulu Star-Advertiser and Honolulu Civil Beat all featured stories about the increasing number of people who have given up on Hawaii and are moving to the mainland to find work. 

With the economy still shut down, workers furloughed and unemployment benefits running out, Hawaii residents are desperate to find ways to feed their families and pay their bills.

Carl Bonham, executive director of the University of Hawaii Economic Research Organization, warned that Hawaii’s negative migration of the past several years in a row is going to accelerate. The most recent prediction is that our population will drop by 19,000 over the next two years. While some might think the population drop is a good thing, leaving more jobs and houses for those who remain, that’s not really how things work. 

There is a reason why people flock to places with good economies and flee places with bad ones. As the state’s population drops, so will our number of doctors, lawyers, entrepreneurs and new businesses. Tax revenues also will fall, deepening the state’s financial hole.

The overly optimistic approach that our state and county officials have taken to address our economic struggles is not supported by the evidence. Economists have warned that there will be no quick bounce back for the tourism industry. 

Adjusted visitor spending for 2020 is down 73% from 2019 levels, and a combination of other facts — diminished income for traveling, concerns about the virus, discomfort with long plane rides and a dislike of travel restrictions like quarantines — means that Hawaii’s tourism industry is looking at a very long road to recovery.

It’s tempting to blame all of our economic problems on the coronavirus and subsequent lockdowns — which, indeed, have been devastating for Hawaii’s economy. But the truth is that we have been on this path for decades. The COVID-19 crisis was merely the straw — albeit a very heavy one — that broke the camel’s back.

As I wrote in Kauai’s The Garden Island newspaper on Sunday ("Great Lockdown Crash of 2020 a wake-up call for Hawaii"), years of high taxes, heavy regulation and profligate spending put our state in a precarious position, and the COVID-19 crisis merely exposed the problems that had been there all along. 

The issue now is what to do about it. A good example of what not to do occurred when Gov. David Ige decided to suspend payments to the public employee health-benefits fund. The state’s unfunded liabilities were an issue for years before the coronavirus. But now they will only worsen.

The good news is that knowing what brought us to this point makes it easier to see the solution. For a recession brought on by taxes, regulations and spending on steroids, it’s called “economic freedom.”

As the Grassroot Institute of Hawaii report “Road map to prosperity” points out, there are policies that could help turn our economy around and put us on better footing than we were before COVID-19. Just as important, they could help us weather future crises. All we need to do is be bold in our actions and embrace the best practices that have helped so many other states succeed.

It isn’t enough that we try to get back to where we were before the lockdowns. Let’s do better. We can make Hawaii a place that attracts talented workers instead of driving them away. Let’s work together to make a more prosperous, more secure economy. 

E hana kakou! (Let's work together!)

Keli'i Akina, Ph.D.
President/CEO