What’s up with Hawaii’s incredible shrinking civilian labor force?

HONOLULU, Hawaii (HawaiiNewsNow) - You probably know that Hawaii has a really low unemployment rate ― one of the nation’s lowest, in fact.

But here’s something you might not be aware of: The state’s civilian workforce is shrinking.

State figures for August put the civilian labor force in Hawaii at 656,800 people. That’s down by more than 20,000 from the same month in 2018.

The drop means Hawaii’s labor force today is about the same size it was five years ago.

State Economist Eugene Tian said there are two reasons that the labor force shrinks: Workers leave the state or they stop looking for a job.

[Read more: Report: Hawaii’s economic prospects look ‘increasingly dicey’]

The latter probably isn’t happening to a significant degree, he said.

Hawaii’s low unemployment rate ― which stood at 2.7% in August ― means employers are scrambling to come up with incentives to fill vacancies.

People who want a job, he said, can probably find one.

That leaves out-migration for the mainland.

Tian said that workers are likely heading to other states for a number of reasons, including a lower cost of living, higher pay and better opportunities.

Hawaii is no stranger to out-migration. In fact, Hawaii lost so many people to the mainland over the last two years that the state’s population dropped. Births and arrivals couldn’t make up for the departures.

Tian said the decline in the civilian labor force likely means that Hawaii could see a third year of population decline.

He called the 20,000-person drop in the civilian labor force over a year “big.”

Earlier this month, University of Hawaii economists also pointed to the population decline as a serious drag on the state’s overall economic health.

They noted that the last time Hawaii’s population dropped for two years in a row ― like it did in 2017 and 2018 ― was in the 1950s.

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