Hawaiʻi to lose more than $400M per month without extension of unemployment supplement

Unemployment insurance in Hawaii normally pays out 62 percent of a worker’s monthly income, which is what it will now revert to following the lapse of CARES Act funding. That means a major loss of income for individual workers and the communities in which they live—a situation Beth Giesting of the Hawaiʻi Budget and Policy Center describes as a “crisis.”

“Taking that much money out of the economy really makes a difference,” Giesting said in an interview. “People can’t spend and that decreases money that is circulating through the community and supporting all kinds of jobs.”

A particular feature of the COVID-19 recession is that the workers most likely to have lost their jobs were also some of the lowest earners: people in retail, hospitality, and food service. They’re often described as Asset Limited, Income Constrained, Employed, or ALICE, workers.

“At the wages they were making, many were not able to pay for the basic subsistence budget,” Giesting says, which she estimates at roughly $35,000 per year before taxes.

Several of the industries hardest hit by the pandemic recession pay wages at or below that level, including food service and retail. For workers who were barely getting by on their normal salary, receiving only 62 percent of that income presents an even direr problem.