Hawaii 2011 - Economy
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Louis Smith will soon finish his training as an air-conditioning |
Gains and losses
Hawaii’s household income has grown substantially since 2000, but those gains have been more than eaten up by inflation, leaving the average family a little further behind. Fewer children are living in poverty now and our unemployment rate remains much lower than the national average, but the cost of living in Honolulu – a barometer for the whole state – remains one of America’s highest, topped only by New York City.
Action Needed
In good times, Hawaii needs up to 28,000 trained workers a year to fill new openings and retirements in the trades and professions. To fill that need and prepare people for well-paying jobs, Hawaii needs to teach math, reading and other basic skills more effectively in public schools.
Help wanted: More skilled workers
For Hawaii’s economy to succeed, it needs more skilled workers like Joseph Doyle.
The 31-year-old single father of three boys is halfway through a two-year program at Honolulu Community College that is training him to be a skilled welder.
Doyle was squeezing odd jobs like tinting windows between work as a pressure-washer, but realized that didn’t create a solid future. “I need a trade – instead of being a jack-of-all-trades,” he says.
In good times, Hawaii requires up to 28,000 trained workers a year to fill new openings and retirements in the trades and professions, according to HCC, the state’s chief trade school. But only 14,000 students a year graduate from the state’s public and private high schools – and many grads aren’t ready for college or skilled employment because they lack basic skills in math and reading.
“Workforce expectations have changed,” says HCC chancellor Michael Rota. “The jobs that have left the economy are the low-education jobs, and they’ve been replaced by jobs requiring more education than high school.
“But the skills our kids have with a high school diploma don’t match the skills needed. So if we’re going to be successful, we have to get a higher percentage of our young people ready for work or further education when they leave high school,” Rota says.
Louis Smith wishes he had gotten more out of high school. “I would have liked a program like this in high school,” says Smith, a second-year student in HCC’s air-conditioning/refrigeration mechanic program.
He’s been chosen for a part-time position at the Naval Facilities Engineering Command at Pearl Harbor and that could mean a solid job after graduation. “I feel set for life,” he says. “People tell me I’m lucky I got in.”
Inflation is a Thief
Statewide per capita income increased 48 percent from 2000 to 2008 and stayed well ahead of inflation. But another key measure – Hawaii’s average household income – fell behind inflation.
The Census Bureau says average household income in Hawaii was $49,820 in 2000. In 2009, it had risen to $64,661, a gain of almost 30 percent. But Honolulu’s inflation rate – a rough guide to statewide price increases – averaged 3.0 percent a year in the same period. That means the average family’s buying power declined.
Two Crises for retirees
- Many people have saved too little for their retirement
- Many make bad-investment decisions with their 401(k) savings
Hawaii’s workers are not saving enough for retirement, says financial analyst Cris Borden, a professional fiduciary with his own firm, Kobo Wealth Conservancy.
“We haven’t seen many people with anything close to adequate savings for retirement,” Borden says.
But Matthew Bossenmeyer shows there’s hope for workers who start late on their savings or have to change careers. At age 49, he entered an apprentice program through the Hawaii Carpenter’s Union when his printing jobs disappeared as that industry declined.
Today, at 55, he just gained journeyman status and is saving money every week while working for Coastal Construction in Ewa Beach. He plans to retire at 62 when his mortgage is paid off.
“Even if you start as a 40-percent apprentice, in no time you’re making almost $20 an hour, with really good benefits.”
However, Borden points to another area of concern: The growing dependence on 401(k) plans means employees are choosing their own investments for retirement decades away. “The guy pushing the broom is making the decisions for which he doesn’t have the education … and yet we’re allowing them the largest financial decision they will ever make.”
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