Hawaii, USA (KITV) — More than 3,000 island businesses remain closed because of the faltering economy.
Hawaii’s state economist believes it will be years before the negative financial effects of the pandemic disappear, even though conditions are expected to dramatically improve later this year.
At Ohana Hale Marketplace’s Waffle and Berry, every creation is meant to be a sweet treat – even as the pandemic soured business for other owners.
“COVID has been hard on everyone, but I have tried creative ways to keep the business going,” said Cal, who runs Waffle and Berry.
A number of nearby shops and restaurants have temporarily closed, just some of the more than 3,000 island businesses that shut down and have remained closed over the past nine months.
Those closures are the reason more than 100,000 residents remain unemployed.
During this pandemic, Hawaii’s unemployment numbers were twice as high as a decade ago – during the great recession.
“This is the largest recession in Hawaii’s history,” exclaimed state economist Eugene Tian.
“A lot of people gave up. Some knew it would take a while to recover, so they moved their business out. I knew some people who moved off island even,” said Aloha Island & Naturals Owner Tess Abalos.
Over the past 4 years, Hawaii had 5,500 residents move away annually, but those numbers could end up being higher for 2020.
For 2021, the state’s unemployment rate is expected to be up around 8 percent, while Hawaii’s growth rate is expected to be much lower: around 2%, at least for the first half of the year.
“Once tourism starts, recovery will be fast. Maybe that will happen in the second half of the year, maybe after summer,” said Tian.
Already Cal has seen a slight increase in customers as more visitors return. He remains hopeful for 2021, as do some other small business owners, struggling to stay afloat, until the economy returns to normal.
“We are optimistic business isn’t dying, it is moving along in a positive direction,” stated Cal.
“I will do the best I can, with what I have and not give up. It is going to take a couple of years, we all know that,” added Abalos.
Even more than a couple years, according to the state’s economist.
“Our projection: the economy won’t return to the 2019 level until 2025,” said Tian.
Not everything is negative financially. Bankruptcies usually go way up during a recession, but this time around, thanks to stimulus money and safeguards for residents, bankruptcies are actually down.
Interest rates are also low, which is good news for homebuyers but bad news for people saving money.
Because of the additional stimulus money, personal income rates have also increased for many Hawaii residents.
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