Hawaii’s worker shortage goes NUTS

The Federal Reserve’s latest Beige Book reveals a paradoxical economic landscape in Hawaii, where a record-low unemployment rate of 2.2% exists alongside a struggling tourism sector and severe agricultural labor shortages. While businesses face desperate needs for workers in construction and hospitality, wage growth remains stagnant due to rising operational costs from inflation, insurance, and tariffs. Carl Bonham of the University of Hawaii Economic Research Organization notes that the state's geographic isolation prevents the typical influx of mobile labor seen on the mainland. These pressures are particularly acute for the macadamia nut industry; Jeff Clark of Hamakua Macadamia Nut Company explains that the steep volcanic terrain requires arduous hand-harvesting that is no longer economically viable at $20 an hour. Consequently, the industry is pivoting toward long-term mechanization and replanting orchards on flatter ground to survive the tightening labor market.