Molokai Economic Outlook Grim

But Positive Signs Can Be Found.

By Sean Aronson

Read any newspaper or turn on any television and the news is the same wherever you are – the economic situation is dismal and the end does not seem near. This year, it‘s been one bad headline after another – the collapse of the housing market, liquidating banks and businesses filing for bankruptcy at every turn.

The State of Hawaii is facing a huge budget shortfall and the tourist season will likely bring more of the same. A recent University of Hawaii report found Island visitors have been falling by double digits for the past few months, and experts expect this trend to continue well into 2009. The Department of Business, Economic Development and Tourism (DBEDT) recently reported its third quarter numbers for 2008 and found Hawaii visitors down by 17% over the same time last year. Tourists are also spending less, amounting to $200 million that won’t be poured into the economy.

Yes, things are bad everywhere, but in Molokai it’s particularly dire. The island’s unemployment rate has more than doubled from last year – from 6.8 percent to a staggering 15.3 percent in September. The Molokai Ranch closing is the most obvious reason for the high rate, but there are other pressing issues as well. A survey of local business owners and community members found a system wide downturn and the coming holiday season is unlikely to offer much reprieve.

Employment
It’s no secret, jobs on Molokai are few and far between and its distinction as the Hawaiian island with the highest unemployment rate is not a title Molokai residents would like to keep.

Despite the bad news, help is available. The former employees of Molokai Ranch have been given work placement help from Workforce Development Molokai. Of the 98 employees receiving assistance, 58 are currently employed, according to the agency. That’s roughly 60% back on the job, nearly six months since the Ranch shut its doors in April.

Several of the employees have found work at Monsanto, according to Alberta Patchen of Workforce Development. Patchen also noted that a few positions are opening up with the State Park Services in Kalaupapa. These include a recycling job and work in the topside museum. There are also computer and driving training programs being offered at Maui Community College.

Workforce Development received a National Emergency Grant for nearly $400,000 from the Department of Labor back in July to help the former Ranch employees. This money cannot be used for any other unemployed people on Molokai, according to Patchen. But some of it will go towards training programs available to the entire island, she said.

Patchen says any employer with openings should contact her office at Makaena Place in Kaunakakai. They can be reached at 553-1755. Those seeking employment should also contact the Workforce Development office.

Housing

Statewide, Hawaii has felt the housing crunch along with the rest of the country – not the worst and not the least. Foreclosure filings in Hawaii tripled last month amid the ongoing economic downturn, according to research firm RealtyTrac.

Friendly Isle Realty owner Ray Miller reports rentals are down a bit from last year and he is expecting the ‘busy’ season of December to April to be a lot less busy.

“It’s a trend we’ve been seeing for the last two years,” says Miller. He adds that prices have stayed about the same on home sales while dipping slightly for rentals.

Other property owners report similar anecdotal evidence and are waiting until Christmas for hard numbers to compare with last year.

On a positive note, Miller did mention that it’s a good time to buy a house or property as interest rates are low and there are some outstanding deals to be had on Molokai.

Business

Molokai’s local businesses are feeling the economic pangs along with the rest of the community.

Gas prices are the biggest determinant of success these days according to local business owners. Some, like Crystal Egusa of Friendly Market, say they have tried not to pass on the increased prices to consumers, but it has been difficult.

“We have tried to absorb the fuel costs,” says Egusa. “But when the wholesale costs go up, we do have to account for that.”

The rising grocery prices have increased the importance of more traditional ways of putting food on the table, including hunting and fishing.

Zessica Apiki, Molokai Economic Opportunity Branch Director, is one such person looking to alternative sources. Apiki says, “My family still rely heavily on subsistence and we eat fish that we catch at least once a month or more often. I also have brothers who love to hunt and we like to eat venison.”

Outlook
The financial crisis is a global phenomenon and Molokai will no doubt be impacted by actions around the world. Asian and European markets are struggling even worse than in America, compounding the situation at home. It’s not debatable that tourism on Molokai will be affected by worldwide problems; it’s now a waiting game to see just how bad it will be.

Data for hotel availability and rental properties during the high season is not out yet, but business owners are expecting them to tell a dismal story.

“We’ll know what were in for soon,” says Ray Miller of Friendly Isle Realty. “It’s just a matter of time.”

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