Hawaii’s Unemployment Rate May Be Higher

by Pearl Hahn

As of June this year, Hawaii’s unemployment rate stood at 7.4 percent, representing 47,700 people. This is well below the national average of 9.5 percent. (According to the U.S. Department of Labor, Hawaii’s unemployment rate is at a 31-year high while the national rate is at a 26-year high).

These numbers are not without controversy. In fact, many accuse the Department of Labor of lying to the public with these figures, as they paint a prettier picture than reality.

Here’s the problem with taking the national 9.5 percent unemployment rate at face value: the Labor Department only counts people as unemployed if they meet a certain number of criteria, including whether they actively looked for work in the four previous weeks.

That means if you gave up looking for work five weeks ago, you are no longer counted as part of the “labor force” by the Department, and you are left out of the Department’s calculation of the unemployment rate.

I find this pretty sneaky. Having given up looking for a job doesn’t change the fact that you’re unemployed, and certainly shouldn’t exempt you from being calculated into the national unemployment rate!

The Labor Department does calculate a separate (and more accurate) unemployment rate that includes those who should have a full-time job but do not. For June, that number was 16.5 percent. It has since crept down to 16.3 percent for July.

Though the “true” unemployment rate is over 16 percent, the Labor Department is doing Americans no favor in airing the misleading 9.4 percent calculation in the media.

While the Honolulu Advertiser and Star Bulletin claim Hawaii’s unemployment rate is currently around 7 percent, the actual number of those unemployed is, undoubtedly, significantly higher.

Pearl can be reached at policy@grassrootinstitute.org