Hawaii’s worker shortage goes NUTS

Summary of Hawaii’s worker shortage goes NUTS

by NPR

8m•January 29, 2026
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Overview of Hawaii’s worker shortage goes NUTS (NPR)

This episode of NPR’s Indicator (the hosts Robert Smith and Waylon Wong) uses a Beige Book anecdote to spotlight an odd economic puzzle in Hawaii: very low unemployment (around 2%) alongside persistent, localized labor shortages — notably in macadamia nut and coffee harvesting, tourism, and construction. The show awards the San Francisco Fed a “Beji” for reporting the Hawaii story, and includes interviews with Carl Bonham (director, U-HERO / University of Hawaii) and Jeff Clark (president, Hamakua Macadamia Nut Company) to explain why workers are scarce and what farms and businesses are doing about it.

Key takeaways

  • Unusually low statewide unemployment in Hawaii coexists with sectoral labor shortages (agriculture, tourism services, construction).
  • Labor mobility is limited: workers don’t simply relocate en masse to islands when jobs open.
  • Wages aren’t rising quickly enough to match the implied tightness; firms face constraints that limit their ability to raise pay.
  • Cost pressures (inflation, tariffs, rising insurance) and weaker per-visitor spending in tourism reduce businesses’ capacity to increase wages or hiring.
  • Macadamia nut harvesting in Hawaii is particularly hard-hit because many orchards are on steep, older plantings that require hand-picking — physically demanding, low-attractiveness work.
  • Farms commonly pay roughly $20/hour for seasonal/visa workers and must also provide housing because local housing prices are high.
  • Longer-term solutions discussed include replanting orchards on flatter land to enable mechanized harvesting and shifting toward mechanization, but these are time- and capital-intensive.

Notable quotes and moments

  • Minneapolis Fed (runner-up): “More businesses were using temporary or contract workers to stay flexible in uncertain times.” — used to illustrate broader labor adjustments.
  • Carl Bonham (U-HERO): labor isn’t as mobile as markets assume; businesses struggle to find skilled workers despite low unemployment.
  • Jeff Clark (Hamakua Macadamia Nut Co.): “We cannot afford to hand-harvest macadamia nuts anymore. We really need to move towards mechanization.” — highlights the practical, economic pressure toward replanting and mechanization.
  • Colorful, humanizing moments: hosts joking about Hawaiian shirts and the coining/usage of “mac-nutting” as a verb.

Topics discussed

  • Beige Book process and regional Fed reporting (and the Minneapolis Fed’s new video Beige Book)
  • Hawaii’s local labor market dynamics vs. headline unemployment
  • Sector breakdown: macadamia and coffee agriculture, tourism (lower per-visitor spending), construction
  • Practical farming details: steep orchard terrain, hand-harvesting realities, immigrant seasonal labor on visas, housing needs
  • Business responses: temporary/contract hiring, mechanization/replanting, paying higher wages but offset by costs

Practical implications and recommendations

For farmers and employers

  • Invest in mechanization where terrain allows; for many orchards this will require replanting on flatter land (long runway).
  • Budget for worker housing or partner with local housing providers to attract/retain seasonal labor.
  • Consider targeted recruitment of temporary/visa workers and plan for their accommodation and transport costs.

For policymakers and regional planners

  • Support workforce training and retention programs for tourism, construction, and specialized agriculture roles.
  • Explore incentives or financing to help farms replant and mechanize (grants, low-interest loans).
  • Address housing affordability to reduce employer costs for worker housing and improve labor attraction.

For economists/analysts

  • Be cautious interpreting headline unemployment as uniform labor market tightness; sectoral and geographic frictions matter.
  • Monitor tourism spending composition (not just arrivals) as it affects wages and hiring capacity.

Why this story matters

Hawaii’s case is a clear example of how headline macro indicators (low unemployment) can mask acute local and sectoral labor frictions caused by geography, industry structure, and high living costs. Solutions require time, capital, and coordinated policy/business responses — not just higher nominal wages.