Economists say focus on state's labor force participation rate, not unemployement rate

Published On: Mar 10 2014 08:15:00 PM HST

Employment rates are projected to increase a bit over the next two years.

Click here for the report.

The University of Hawaii Economic Research Organization says the unemployment rate is a poor way to judge the health of our economy. Instead, economists point to the state's labor force participation rate which measures the actual number of people available to work.

Last year, labor force participation in Hawaii totaled 57.4 percent, compared to 64.3 percent in 2006.

"This just tells you that the low unemployment number isn't the greatest way of looking at your economy," said UHERO Executive Director Carl Bonham. "If your unemployment number is very low, as it has been in Hawaii….[and] you've got people who've left the labor force, then it's not something to get excited about."

On Tuesday, Bonham will be part of the panel deciding whether to further downgrade the state's general fund forecast.

The Council on Revenues forecast helps state lawmakers decide how much money to spend during the legislative session.


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