COVID-19’s Uneven Impact on Businesses and Workers: Results from a UHERO-Chamber of Commerce Hawaii Survey

By Philip Garboden

County breakdown update: https://uhero.hawaii.edu/county-results-from-small-business-survey/

Right now, everyone is making sacrifices. But as with any natural disaster, some people and places are being hit harder than others. 

To better understand these dynamics, UHERO partnered with the Chamber of Commerce Hawaii and a dozen other industry associations across the state to field a survey of the impact of the COVID-19 shutdown on businesses and their employees [1]. In just a week, we collected data from 623 businesses. Thanks to each of you for taking the time to complete the survey! All business responses are confidential.

These data provide otherwise unavailable insight into the impacts of the economic crisis. They are already being used to inform our forecasting work and contain many interesting findings. In this initial post, we focus on the number one question: who is most affected by the shutdown?

Industry losses are large, and concentrated where you would expect them

The survey collected information on the number of employees each company employed in January of this year and the number that were still on payroll in April. We also asked businesses to provide their revenue in 2019 and to estimate what it will look like in 2020 – no easy task given the ever-changing nature of the virus response.

In total, businesses reported reducing their workforces by about 220,000 full- and part-time workers during the COVID-19 economic shutdown. A shocking figure, but not surprising given the number of unemployment claims being processed by the State.

Table 1: Employment and Revenue Impacts By Sector

Employees Revenue
Percent of Revenue from TourismJanuary, 2020Change Jan to April% Change2019 (Mean)Anticipated Change 2020% Change
Accommodation90.88%8,268-6,369-77.03%$2,139,409-$1,049,091-49.04%
Administrative and support and waste management
Agriculture, forestry, fishing and hunting*4.92%4,745-9,91-20.89%$2,385,298-$401,047-16.81%
Arts, entertainment, and recreation89.80%8,823-7,269-82.39%$2,015,843-$1,306,040-64.79%
Construction9.74%34,366-9,326-27.14%$6,349,500-$178,731-2.81%
Educational services0.83%13,240-7,129-53.85%$2,031,167-$825,000-40.62%
Finance and insurance23.41%15,950-102-0.64%$8,574,861-$1,199,361-13.99%
Food services38.93%77,187-42,041-54.47%$4,981,919-$2,134,973-42.85%
Industries not classified58.91%1,285-550-42.75%$1,551,752-$693,836-44.71%
Information
Management of companies and enterprises
Manufacturing36.19%13,073-6,081-46.52%$17,750,992-$5,432,462-30.60%
Other services (except public administration)43.48%12,092-7,370-60.95%$2,998,851-$1,215,716-40.54%
Professional, scientific, and technical services10.69%19,826-1,897-9.57%$1,447,861-$281,891-19.47%
Real estate and rental and leasing23.70%10,903-2,044-18.75%$869,842-$214,763-24.69%
Retail trade66.99%58,760-45,012-76.60%$3,600,375-$1,502,469-41.73%
Transportation and warehousing20.48%28,562-1,654-5.79%$7,599,416-$2,409,262-31.70%
Utilities
Wholesale trade60.31%16,364-4,576-27.96%$4,866,750-$1,456,125-29.92%
Note: Sectors with fewer than five responses have been removed.
*The agriculture number originally reported included an outlier observation which, upon examination, we do not consider reasonable. This line reflects the removal of that observation.

As one would expect, these hardships are not evenly spread across industries. The hardest hit in terms of full-time employee reductions were accommodations (hotels), down 83%, and retail businesses, down 76%. Food, educational, and other services all also saw reductions north of 50% of their pre-crisis full-time workforces.

The anticipated changes in 2020 revenue, while at best guesstimates at this time, provide a sense of employer optimism or pessimism. They tell a similar story to the job loss reports, with a couple of important exceptions. Owners of retail businesses, one of the largest losers in terms of employees, were more optimistic about overall revenue, estimating just a 19% drop. In contrast, management companies are not experiencing large reductions in staff so far, but expect a substantial decline in revenue for the year overall.

In total, about a third (31%) of businesses reported that their revenue has been reduced to essentially zero during the shutdown, including 56% of hotels, 46% of restaurants, and 44% of retail.

The most vulnerable workers are also the most impacted

Within businesses, there are also differences in which employees have been let go. Unfortunately, the trend here suggests that many of the employees who have lost wages during this period are some of the most vulnerable – what are sometimes referred to as “ALICE” families (Asset Limited, Income Constrained, Employed), who have been shown in recent studies to be the most affected by Hawaii’s cost of living even under normal circumstances.

Table 2: Percentage of Jobs Lost by Job Type and Salary Range

% Change in Total Jobs
(Jan to Apr 2020)
Full-time41.69%
Part-time51.43%
Full-time by Salary Range
<$30k Salary30.82%
$30-50k35.04%
$50-100k30.50%
$100-200k28.38%
>$200k22.41%
Note: While rare, some changes may reflect movement between categories rather than job eliminations.

Part-time jobs were more likely to have been lost than full-time (56% compared to 43%). Among full time employees, those earning less than $50,000 per year were more likely to lose their position (35%) compared to 30% of those earning $50-$100k, 26% of those earning $100-$200k, and 16% of those making over $200k.

Oahu has the numbers, but tourism is clobbering the Neighbor Islands 

Of course the largest absolute number of job losses has been on Oahu, but Oahu job losses as a percentage of their January level (38%) were significantly lower than for businesses located on the Big Island (48%), Kauai (52%), and Maui (58%).  This is consistent with the larger share of tourism-reliant companies on the Neighbor Islands. 

What do we know so far?

While this is a first look at the numbers, these statistics suggest several things: 

First, businesses are suffering mightily, having already made painful cuts in staff, and they anticipate a very rough 2020 financially. 

The good news is that most of the businesses surveyed anticipate being able to open and staff-up as soon as it is safe to do so. Indeed 60% said they could return to full staff almost immediately, with the rest phasing in as tourism returns to the Islands.

Unfortunately, the data we collected suggest that the Small Business Administration PPP forgivable loan program may not be enough to sustain many businesses. It will certainly help increase the retention of workers, primarily in part-time positions. But 24% of the businesses surveyed said that if no additional support is made available to them, they do not see their business surviving, and another 32 percent said they anticipate needing to make more staff cuts in order to survive. 

Finally, the impact of the crisis will hit hardest the very people and places who are already the most vulnerable. While we did not find statistically meaningful differences in outlook based on gender or ethnicity of the business owner, we do show that the employees who have lost their jobs are likely those already struggling to make it. This will have wide-ranging consequences for these families and the need for supportive social services. 

Update: County Results from Small Business Survey

A note on the survey analysis process: As noted above, we received hundreds of responses in quite a short amount of time. It would be ideal if these responses were entirely random, but the reality of any online data collection is that some types of business owners were more likely to hear about the survey and fill it out. To correct for differences in industry response rates, we have reweighted responses so that the total number of employees reported by businesses in the survey matches the totals for each business sector as reported by the Bureau of Labor Statistics. Overall, this weighting was relatively successful: the number of layoffs estimated from the weighted data is roughly in line with the number of unemployment claims filed over the past several weeks.

In interpreting percentage changes, note that our survey did not collect data on public sector employees or any of the large medical systems. Thus, it should not be generalized to all jobs in the state. The goal of the survey is to produce rough estimates of policy relevant statistics quickly, not to replace or challenge any official data from administrative records.

UHERO BLOGS ARE CIRCULATED TO STIMULATE DISCUSSION AND CRITICAL COMMENT. THE VIEWS EXPRESSED ARE THOSE OF THE INDIVIDUAL AUTHORS.


[1] Thanks to Chamber of Commerce Hawaii, The Hawaii Island, Kauai and Maui Chambers of Commerce, The Retail Merchants Association of Hawaii, the Pacific Resource Partnership, Hawaii State Bar Association, Hawaii Restaurant Association, the Chinese Chamber, Kalihi Business Association, the Hawaii Foreign-Trade Zone, and the Hawaii Food Manufacturing Association for help promoting the survey.

Photo by Peter Fuleky.

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8 thoughts on “COVID-19’s Uneven Impact on Businesses and Workers: Results from a UHERO-Chamber of Commerce Hawaii Survey”

  1. I had a particular question for Dr. Carl Bonham. Do you forecast a high influx of Hawaii residents moving away from Hawaii;once travel restrictions are lifted, due to our lack of diversity of our work environment and our relying heavily on tourism? Also, our isolation of being here on an island limits what we can and cannot do as far as work/jobs go. On the US-Mainland, people are able to move to another area or another state to look for other sources of work.

    1. Given the kerfuffle over the Stanford study, kudos to you for being upfront about the survey analysis.

      Can you comment on how these results may interact or collide with plans to diversify/engineer the HI economy via the post-covid task force led by Oshima? If you accept that diversifying away from low value add industries/jobs (tourism, food service, retail, etc) is net positive at the margin, wouldn’t these results be somewhat concerning since there’s a good chance that the surviving businesses won’t be part of the post-covid plan and will have political capital to fight it?

    2. Our current baseline forecast does include a larger decline in population than we have seen over the past several years. Hawaii’s population (really Oahu) has declined for the past 3 years. https://data.uhero.hawaii.edu/#/series?id=150382&data_list_id=25. As the health risks begin to wane and other parts of the country recover more quickly than Hawaii, we expect the rate of decline to grow sharply in 2021 and then slow as Hawaii’s economy gradually recovers. More in our next forecast update. Aloha, Carl.

  2. HAWAII NEEDS THE RETURN OF THE TOURIST…..DROPPING THE QUARANTINE IS NECESSARY PERHAPS BY ALL THE TESTING ON THE MAINLAND THEY WILL ISSUE A CERTIFICATION
    OF NO VIRUS…..”CLEARED FOR CONTACT”…. DOCUMENT…..ALERTING THE AIRLINES OK TO ISSUE A TICKET TO HAWAII…………AND AIRLINES MUST COMPLY……

    1. Thank you for stating this rational and obvious solution to returning visitor to our State, re-starting the economy, and ensuring that Hawaii remains the very safe place it is internationally. Our relative safety from CV-19 has caused dramatic economic disruption but the end result is a competitive advantage for our State and economy.

      Travel safety is one of the most sought after components of any travelers decision on their travel destination. With this competitive advantage we can begin to move from Walmart tourism to a a more discerning and high value industry.

    2. Walter M. Kishimoto

      I totally agree. This is the safest and most sensible approach as we have sacrificed a lot to cleans our Islands of the virus. It would be foolish to think that taking temperatures of passengers will assure that no new infections enter the state. Common sense should apply here. It will be far worse to re-infect our population and then have to close-down again.

  3. Allan Parachini

    Where are the full data, especially data for individual neighbor islands? This blog post seems incredibly shallow and incomplete. I participated in this survey on Kauai.

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