This past week my family got together for a special family dinner. We were celebrating! My mother in law had received her first vaccination shot. Our dinner felt different. It felt lighter like a turning point had arrived. This next week, my wife, who is a school teacher, will receive her first dose.
Access to vaccines is ramping up — the most important and hopeful driver of a future where travel is normalized again and our Hawaii economy returns to health. The new U.S. administration is speeding the vaccine rollout and it can’t happen fast enough for Hawaii’s employers.
At the same time, the State legislature is now convening. While it looks like the ‘Leg’ is mostly focused on how it is going to pay the bills, through its actions this session, it will be shaping what type of economic environment (and jobs) we will have for the future of Hawaii.
During the pandemic, larger national employers and online retailers have thrived. They have lower cost structures and serve other healthier markets, making them well equipped to outcompete local companies that only operate in Hawaii. Local employers have taken disproportionate pain in this recession and continue to bear a disproportionate impact. The health of these employers is a Statewide issue. These companies create most of the middle-class jobs in the State, and pay for a good share of government services.
As the State looks for how to pay its bills and reduce its costs, we must acknowledge that Hawaii’s local employers compete on a bigger stage and need community support. The most immediate issue is whether local businesses should bear the full responsibility for the cost of replenishing the unemployment trust fund, which was drained by the societal decisions to shut down the economy in 2020 (see below for more.)
Change is afoot and change is necessary. Let’s get our community talking about these issues because together we can bring about not just the change we seek, but the change we need.
Continuing to Innovate and Advocate for what you Need as we Rebuild in 2021
Many of you exhibited incredible resilience in 2020 — changing how you attract and engage customers, making tough choices to care for your workforce, and innovating in the face of upheaval.
It is inspirational what you’ve done. But as we’ve been saying, this is a marathon, not a sprint, and the reinvention that started in 2020 will continue through 2021 and beyond. The major trends that existed pre-pandemic were only accelerated by the pandemic and will continue even after we think things have returned to normal. This brings urgency to our continued efforts.
At ProService, we are working harder than ever to drive for what you need. Just as we recovered from the Great Recession before, we will do so again and ProService will drive to be the knowledgeable, highly responsive partner in your corner that you count on when the times are tough so that you are equipped and can focus on your core business needs.
A Brief Update on SUTA
Today, we need our lawmakers to fully appreciate the challenges that remain in 2021. Business health depends on it today, and as shared above, it's critical that we recognize that these decisions shape what jobs and businesses will be in Hawaii in the future.
As you are by now familiar from my previous emails, state unemployment taxes (SUTA) are expected to rise sharply in 2021 and in the coming years, unless action is taken. The reason for this is that businesses are currently solely responsible for funding the trust fund, but the fund was not designed to pay for a pandemic.
Right now two sets of bills are simultaneously making their way through the House and Senate.
The Governor’s Administration has proposed Schedule D, F & G for 2021, 2022, and 2023 respectively (HB1005 & SB1159), meanwhile, the House has proposed Schedule C, D & E for the same years respectively (HB470 & SB682). Both sets of bills also call for the exclusion of all unemployment claims for 2020 in determining 2021 rates.
While this is a step in the right direction, our stance at ProService remains the same. We advocate for Schedule C for 2021 and 2022, in addition to excluding 2020 unemployment utilization. The mass shutdowns that triggered unemployment to skyrocket were societal decisions to respond to an unforeseen catastrophe and we cannot fairly hold employers responsible for footing the bill alone. We must urge lawmakers to look for other sources of funding, not just employers.