Speakers painted a bleak picture Monday of Hawaii’s near-term economic future during a teleconference conducted by the state House Select Committee on COVID-19 Economic and Financial Preparedness.
Lauren Zirbel, executive director of the Hawaii Food Industry Association, told committee members food sales at restaurants that remain open continue to drop — even though trips for food, whether to the supermarket or to restaurants offering drive-through or takeout meals — are allowable under the state’s stay-at-home order which is in effect through April.
“Takeout is not even coming close to making up for the losses in dine-in, and hotels and restaurants have closed,” Zirbel said. “And food service options in grocery stores are down as much as 60% in some areas.”
Because of the decline, “layoffs are occurring on the supply-side of the food chain as well on the food-service side. And many of these layoffs started to occur prior to the passage of the CARES Act,” she said.
Zirbel said a second wave of negative economic impacts is starting to take effect as Hawaii’s food industry is “seeing sales slow down on most items except staple items.”
“We’re not seeing the increases the previous two weeks when people were trying to stock up,” she said, referring to the initial wave of panic buying at the beginning of the pandemic, when people cleared store shelves of items including canned foods, bottled water and toilet paper.
Members of Hawaii’s congressional delegation previously said the CARES Act — short for the Coronavirus Aid, Recovery and Economic Security Act — is expected to pump about $4 billion in federal aid into Hawaii’s businesses, residents and local governments.
Carl Bonham, an economist and executive director of the University of Hawaii Economic Research Organization, said about $2 billion of that money already is earmarked for certain purposes.
That includes the $1,200 stimulus checks adult residents have been told they will receive from the federal government, as well as an increase in unemployment insurance funds. Bonham added it’s important Hawaii receive and wisely deploy the remaining $2 billion.
He said the local banks are busy processing applications for the Small Businesses Association’s Paycheck Protection Loan Program, created through the CARES Act, to provides small businesses with zero-fee loans of up to $10 million to cover payroll and other operating expenses.
“Just like (processing) the unemployment insurance claims, this is a huge task,” Bonham said. “I think the most recent data we have for SBA loans made in the state was on the order of … 27,000 loans in an entire year. And we may be trying to make that many loans in the next several weeks.”
Bonham said the loans could put 90,000 employees back on the payroll in the retail trade, arts and entertainment, and accommodations and food services. That in turn, he said, would help take pressure off the Department of Labor and Unemployment Insurance Division.
About 170,000 unemployment claims were filed in March — almost a quarter of the state’s workforce — the Department of Labor and Industrial Relations said Friday. About 10,000 of those claims were duplicates, as the online application system was overloaded and some filers didn’t receive confirmation their applications were received.
Email John Burnett at jburnett@hawaiitribune-herald.com.