Maui Business Report

Growing Pains for Maui’s Hot Economy

Low unemployment a double-edged sword

A year after the closure of Hawaiian Commercial & Sugar, Maui’s unemployment is near zero, with the majority of laid-off plantation employees having been absorbed into the workforce. But whether those workers were able to land jobs that match their former salary and benefits is another question, say Maui business leaders.

“The biggest challenge for them was the gap — starting over new, and the wages they were making, and the hardship created by that,” says Pamela Tumpap, president of the Maui Chamber of Commerce. Many HC&S workers came with highly skilled and specialized training that didn’t immediately translate to other industries on Maui, she noted.

With an economy dominated by service sector jobs, wages on Maui tend to be around 30 percent lower than the national average, even though cost of living is more than 65 percent higher than the rest of the country, notes Leslie Wilkins, president and CEO of the Maui Economic Development Board. “The story in Hawaii and in Maui has always been a story of underemployment, not unemployment,” Wilkins says.

Projects like the Daniel K. Inouye Telescope on Haleakala could help grow Maui’s science and technology sector. | Photo: Forest & Kim Starr

The science and technology sector continues to be an opportunity for more high-skilled, high-wage jobs on Maui, says Wilkins. Major projects include continuing work on the Daniel K. Inouye Solar Telescope on Haleakala, which is scheduled to begin operating in late 2019 or early 2020. But more than a single “high-tech” industry, Wilkins says she is seeing growth in a new “innovation sector” of jobs with a strong technological focus across of range of industries, including creative industries, health care, and education. “We see that growth of these high-wage, high-skilled jobs is horizontal across multiple sectors, and we see cultivating that as our opportunity for job creation,” she says.

Strong construction and tourism industires have kept business brisk for shipping company Pasha Hawaii, especially in the area of “high and wide” cargo — oversized items needed for major public works projects, said spokeswoman Emily Sinclair. She noted that major hotel renovation projects were ongoing, while construction work on the Kahului Airport is expected to wrap up later this year. Tourism and retail sectors, which drive container shipping, also remain strong. “Jean Anne (Pasha’s over-high-and-wide specialty vessel), is the only dedicated roll-on/roll-off vessel that calls direct to Maui from the Mainland, so all of these factors continue to help us maintain a strong business on Maui,” she says.

Building projects have included construction of new retail space, including completion of the new Puunene Shopping Center. PetCo moved into the shopping center last year, relocating from a smaller space in the Maui Marketplace, and other businesses including Planet Fitness, HMSA, Massage Envy, Maui Tacos, and Ulta Beauty, have signed leases with the center. Tumpap says Maui has seen a growth in the retail sector, with the expansion of existing stores like PetCo and Lowe’s Home Improvment, and the arrival of mid-size retailers like T.J. Maxx filling some of the vacancies left behind. But the industry still faces challenges, she says. “For smaller retailers, as rents are going up it’s becoming a tougher and tougher environment,” she says.

Small-scale local manufacturing continues to expand, with events like the Made in Maui County Festival helping to launch local products and connect Maui-based entrepreneurs like the Maui Cookie Lady and Two Chicks In A Hammock with buyers and distributors, Tumpap adds. “We’re seeing a lot of success stories,” she says.

But Maui’s hot economy is a double-edged sword. Low unemployment poses a challenge for businesses of all sizes, says Kit Okazaki, a State Farm agaent and chairman of the Maui Chamber of Commerce. “There’s a lot of challenge around finding good, qualified people,” he says. “That’s a consistent theme in the conversations I’m having with business people.”

At the same time, Maui’s hot economy means many companies have more business than they can handle. “People are trying to make hay while the sun is shining right now. People are busy,” he says. “Trying to find a contractor to knock out a wall at our office has been a challenge. It’s like, ‘Call me back in a couple of months.’”