How the Debate Over Reopening Has Agitated Age-Long Questions About the Future of Hawaii’s Economy

By Camryn Fujita (SCR 21′)
Guest Contributor

As many states across the nation begin to re-open businesses to mitigate the economic damage of the COVID-19 pandemic, the state of Hawaii is in a tough situation. Hawaii has one of the lowest infection rates in the nation. As a result, Governor David Ige has allowed retailers, medium-risk “personal service providers,” and restaurants the green light to resume operations in May. The re-opening of the so-called “kama’aina economy,” or the part of Hawaii’s economy that is fueled by local residents has generally been met with approval and relief. 

Hawaii’s remote geographic location allowed the governor to completely close the state’s borders in March, imposing a strict 14 day quarantine for all domestic and inter-island travelers. Last year, over 10 million tourists visited Hawaii, however, officials project 2020 numbers to not exceed 3.5 million. Despite Governor Ige and Lieutenant Governor Josh Green echoing sentiments that they would like to reboot the tourism industry by July, the Governor recently extended that quarantine past the June 30 deadline. This extension, combined with a lack of a clear path moving forward with reopening tourism, has left many industry leaders and members of the public increasingly nervous about the economic consequences. Furthermore, the state government has yet to approve a concrete plan for screening and testing visitors. 

The process of kickstarting tourism: the largest source of private capital and one of the largest sources of tax revenue and employment in the state, has roused fierce debate over how and when this reopening should happen. Lifting quarantine restrictions means exposing Hawaii residents to potentially tens of thousands of contagious visitors, many from the mainland U.S., where many states still have growing COVID-19 hotspots. Lieutenant Governor Green and other lawmakers support a policy of pre-travel testing in order to eventually phase out the quarantine. However, the State Department of Health and the Attorney General’s office argue that until there is a test to determine whether someone is infectious, testing negative at the airport does not mean someone should be allowed to skip quarantine once they land. Furthermore, legislators are struggling with the fact that the U.S. Department of Transportation has stated, regarding the issue, that “while airlines may deny boarding to passengers that pose a direct threat to the health or safety of others, states do not have the authority to require airlines to do so,” meaning that the state cannot completely ensure that everyone entering Hawaii has been tested unless all airlines are also compliant. 

The debate over how to reopen tourism has once again unearthed public frustrations and exposed the vulnerabilities of an isolated state that relies on a single industry heavily influenced by visitors. Nearly 37% of Hawaii residents have filed for unemployment since March, the third highest unemployment figure in the nation. Such figures are largely explained by the fact that most Hawaii locals work in hospitality. Yet public opinion polls have highlighted that over 60% of Hawaii residents continue to support quarantines even if such measures further damage the local economy. 

Many residents are fearful of a spike in COVID-19 hospitalizations in a state that is isolated from the rest of the mainland. Some experts have questioned Hawaii’s ability to handle a severe outbreak, especially with its shortage of doctors, limited space, and the fact that medical supplies, like ventilators, would take longer to be shipped to the islands if they were to run out. Unite Here Local 5, Hawaii’s union representing hospitality, health care, and food service workers, staged a drive-thru protest, demanding that politicians deliver a plan on how they will protect workers in the push to welcome back tourists. When Honolulu Mayor Kirk Caldwell suggested in an interview, that Kaua’i could potentially serve as a test run for reopening tourism, he was met with intense backlash from the public and other politicians. Senate President, Ron Kouichi, said in response, “I want to be clear to Mayor Caldwell. Kauai does not appreciate being identified as a potential test case to go bring in the tourists so you can make better decisions on Oahu.” 

As the pandemic has exposed festering economic and health disparities amongst different socio-economic and racial groups across the country, the pandemic in Hawaii has agitated long-held frustrations with tourists and the state’s heavy reliance on the tourism industry. Most people who work in the hospitality and service industry in Hawaii are forced by extremely high costs of living to take on multiple jobs and are now in this pandemic, some of the people left suffering the most under the state’s quarantine. The current unemployment rate is obvious evidence of just how many locals’ livelihoods depend at least in some part, on tourism. However, that fact is something difficult to reconcile with, especially after reports emerged of police having to arrest and send back many tourists who broke quarantine and bragged about it on social media. To many, such incidences were unsurprising examples of mainland ignorance and disrespect. Locals have also begun to see how an absence of tourists has cleared up traffic congestion and allowed natural spaces, like the popular Hanauma Bay, to recover from overuse.

It is easy for people who do not live in Hawaii to see the islands as little more than a luxury vacation destination. However, Hawaii is a permanent home to over 1.4 million Americans. It is also a state that has been plagued by homelessness, poverty, a “brain drain,” and a growing wealth gap for decades, issues which have only been exacerbated by the gentrification of the islands and wealthy vacationers’ attraction to Hawaii. When adjusted for prices, Hawaii has the highest cost of living and one of the lowest median wages, terrifying statistics for struggling locals and young people from Hawaii deciding whether to try and make a comfortable life for themselves at home or leave for the mainland for better opportunities. Calls to diversify have been happening for years, and there has been progress in developing and attracting tech industries. However, because Hawaii’s economy is small, experts have hypothesized that diversification will be a difficult road ahead since it is more efficient to gain a comparative advantage at one industry rather than have many successful industries. 

As the state plans for ways to rebuild in the coming years, some politicians believe now is the time to finally change the trajectory of Hawaii’s economy toward alternative energy, agriculture, and high tech. However, little can be done about diversification and retaining a local, highly educated workforce if the state continues to rely on tourism numbers to rebound from economic hardship. During the 2008 Recession, Hawaii’s tourism industry and economy took a similar, though not as extreme, hit and many then advocated for moving away from tourism. History has shown, though, that diversification is something much more difficult said than done in Hawaii. 

It will be interesting to see how government leaders choose to move forward after the pandemic, which has caused a shock unlike many have seen before. Will there finally be change or a continued preservation of the status-quo? The long path toward a future diverging from tourism may be slow, involve bureaucratic shifting, and an economic “learning curve.” However, the public and politicians alike, must be able to keep perspective and see economic diversification as an investment in durability and stability through future crises.

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