Hawaii’s employment recovery is a case study on what could’ve gone right for the US: Lt. Gov


The number of Americans applying for unemployment benefits ticked lower last week with the latest weekly total of initial claims coming in below 800,000.

While some states have seen unemployment applications recede from record highs after the coronavirus pandemic first roiled America’s employment picture, one state stands out for just how dramatic it’s comeback has been.

After instituting a mandatory “Safe Travels” testing program for travelers in October, Hawaii’s nation-leading unemployment rate fell precipitously from above 20% to under half that in just a matter of months. According to the latest weekly data from the Department of Labor, Hawaii went from leading the nation at an insured unemployment rate of 21.3% in September to not even being noted among the top 10 states with rates above 4.9%.

It’s a testament to a point repeatedly made by Federal Reserve Chair Jerome Powell again and again — that any economic recovery will inextricably be linked to getting control of the pandemic. As Hawaii Lt. Gov Josh Green, who also still practices on the island as a medical doctor, told Yahoo Finance Live this week, the state’s Safe Travels program has allowed Hawaii to steadily open safely.

“We went from a disastrous situation to, well, let’s just say, a less disastrous situation improving every week,” he said Monday, highlighting a giant drop in new daily cases from around 300 in January to around 100 to start February. At just over 28 COVID-19 deaths per 100,000 people, Hawaii is tied with Vermont for the fewest fatalities in any state, adjusted for population.

Since Oct. 15, the state’s Safe Travels program has required travelers to show a negative COVID-19 test. After early hiccups with testing, the program has proved successful with travel steadily returning to the Aloha state.

“All of a sudden our numbers went from, like, nothing to 10,000 or even 15,000 per day, which was somewhere between 35% and 50% of our baseline,” Green said, adding that the state is actively working with tech partners to create a vaccine passport program to also streamline travel for vaccinated travelers.

“This is going to be important for us through 2021, 2022. It will drive economic growth and recovery, he said. “We will need to get back to some larger portion of our travelers. We used to get 30,000 a day or 900,000 a month, we’ll have to be safer and that will be one way to do it.”

Of course, Hawaii is unique from other states on the mainland by being able to more easily lock out travel by virtue of being its own island. But considering the strength of Hawaii’s recovery, it’s hard not to imagine what shape the U.S. might be in as a nation if similarly stringent measures were taken sooner at a national level. Green thinks the data shows Hawaii’s program could have helped.

“If we had done essentially a Safe Travels program nationally, we could have decreased the cases coming in by about 80%,” he said.

Given Hawaii’s more severe spike in unemployment earlier in 2020, there’s a case to be made that an equally stringent nationwide lockdown would have plunged the U.S. into an even worse unemployment whole to climb out of. On the other hand, extrapolating Hawaii’s case study to the nation as a whole is a little difficult given the state’s economy is uniquely levered to tourism, and thus, the tourism jobs that come with it.

Nonetheless, considering the improvement and progress Hawaii has been able to safely put in place, its road ahead looks a lot less uncertain than another state similarly levered to tourism. Nevada’s 6.1% uninsured unemployment rate remains the third worst in the country as Las Vegas continues to suffer from a drop off in travel. Nevada has also seen about five times as many population-adjusted COVID-19 deaths, according to Centers for Disease Control and Prevention data.

“When you match for the population on the mainland, we should have had 1,600 fatalities. We’ve had 25,000 cases. We should have had 125,000 cases,” Green said. “So the successes are evident about keeping people healthy and safe, but the economic fallout was heavy.”

Zack Guzman is an anchor for Yahoo Finance Live as well as a senior writer covering entrepreneurship, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.

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