Employee hiring among private employers dropped nationwide by 32,000 positions in November in the latest measurement of the American economy that’s also affecting Hawaii’s job market.
Small businesses, like those on Oahu’s North Shore and across the state, have been especially hit.
“It is those mom-and-pop, Main Street companies, firms, small businesses and establishments that are really weathering what is an uncertain macro-environment and a cautious consumer,” Nela Richardson, chief economist at payroll processing company ADP, told the New York Times last week.
“I see them as a canary in the coal mine.”
Carol Philips serves as vice chair of the North Shore Chamber of Commerce and owns the North Shore Surf Girls surf instruction company focused on teaching the next generation of female surfers.
Philips typically employs seven instructors. But with tourism continuing to struggle this year, rising grocery prices, higher import costs because of tariffs and Hawaii’s economy expected to head into a mild recession in 2026, among many other economic factors, the business now has only three instructors.
“It’s slow,” Philips said. “Businesses are not hiring because the economy’s not working. Its quite alarming. There aren’t enough customers. The visitor numbers are going down and the spending is going down. When you have to spend more money on food, you have less for airfare and surf lessons.
‘On top of all those things, people are nervous and afraid. Consumer confidence isn’t what it has been.”
It’s a dramatic turnaround for Hawaii businesses compared to the end of the COVID-19 era, when consumer spending shot up and “help wanted” signs were ubiquitous, along with banners that advertised signing bonuses and higher pay.
Instead today, all across the North Shore, Philips said, “restaurants have closed for lunch or close one day a week because they don’t have enough employees. We’re not seeing ‘help wanted’ signs anymore because we are in more of a recession than people are acknowledging. We are definitely in an era of stagflation.”
Entry-level struggles
The picture can be seen across the country where small business owners now fill employee shifts themselves instead of hiring new workers, according to Dave Brown, CEO of Atlanta, Ga.-based Hays Americas, which produces its annual U.S. Salary &Hiring Trends Report.
The problem may be worse in Hawaii, which relies on tourism and imported goods that have been affected by President Donald Trump’s tariff wars, Brown said.
“You’ve got a lot of nervous companies,” he said. “For the owners, it’s very, very challenging.”
Philip agrees.
“Everybody’s getting pretty nervous. I’m not seeing businesses shutting down yet, but people are nervous,” she said. “Owners are filling in for their employees because they can’t afford to pay their employee.”
According to Brown, entry-level workers have disproportionately struggled to find jobs in their chosen professions. Unemployment among entry-level workers jumped to a nine-year high in 2025, he said, citing federal data.
In September, across the country, they made up 11% of unemployment claims, Brown said.
“It is a very challenging market for entry-level candidates,” he said. “I hear that all the time. These kids want to work but they can’t find a job. If there is hiring, they’re looking for people with experience.”
Tiffany Ling-Nishimoto, 23, graduated in the spring with a bachelor’s degree in psychology from the University of Hawaii at Manoa.
Looking back, she wishes she had done an internship while still at
UH or pursued an additional certificate that would advance her credentials.
Instead of beginning her career in the mental health field, Ling-Nishimoto instead works part-time jobs as a receptionist at a veterinary clinic and in both the front and back operations of a sushi restaurant while now pursuing an online certificate from Windward Community College.
Instead of landing her first job in her chosen field, where she hoped to get on-the-job training, Ling-Nishimoto said that employers instead want candidates with a master’s degree or prior experience.
“You need the experience, so it is difficult,” she said.
The sushi restaurant she works at already was cutting back employee hours months before the federal government shutdown that began Oct. 1, triggering the longest shutdown in U.S. history of 43 days that put additional economic strain on Hawaii.
“The restaurant already had less business,” Ling-Nishimoto said.
At the same time, she said, “a lot of my friends are unhappy with what they’re doing and where they are in life. They’re just working retail or in restaurants, and they’re unsure about their future and what they want to do next.”
For others like Ling-Nishimoto, who was born and raised on Oahu, moving to the mainland to pursue a career is not attractive.
“Even though they’re struggling and unhappy, they want to stay here and make things work,” she said.
Diminished
work ethic
For Lane Muraoka, who owns Oahu’s four Big City Diner restaurants, a long list of relevant work experience isn’t as important as attitude when trying to fill entry-level jobs. All he wants now are young people with a good work ethic, like “being on time, being responsible,” Muraoka said.
The overwhelming majority of employees have been with Big City Diner for years, work hard and are loyal, he added.
“We’re very lucky,” he said.
Still, about 10% of his staff seems to be in chronic “churn,” and finding replacements continues to be difficult, especially among what Muraoka called young, “entitled,” entry-level candidates.
“We always need good-quality people,” he said. “We’re always interviewing. Sometimes you hire them and they don’t bother to show up for work and don’t call. The work ethic has diminished definitely over the decades.”
To survive the current economic uncertainty, Big City Diner offers specials aimed at budget-conscious customers, such as “Military Monday” and “Senior Citizen Tuesday.”
“Today it’s Kids Eat Free,” Muraoka said.
“Even for those with money, from the government shutdown to the tariffs, especially for elderly clientele, the question is: ‘How long will this situation last?’” he said.
‘Unpredictable situation’
The state Department of Business, Economic Development and Tourism on Friday revised its economic forecast to say that Hawaii’s economy grew 1.6% for 2025, with growth likely to drop to 1.5% in 2026.
“Despite the 43-day federal government shutdown, robust visitor expenditures, lower-than-expected inflation and a healthy labor market, as well as stronger-than-expected national economic performance, contributed to the improved outlook,” DBEDT said Friday. “Near-term growth remains subdued due to the impacts of tariffs, overall policy uncertainty and sluggish visitor arrivals.”
The federal shutdown delayed an updated report on Hawaii’s labor force, unemployment and job growth. But through August, DBEDT said the state unemployment rate dropped to 2.6%, or 0.6% lower than the year before. In August, Hawaii had the third lowest unemployment rate in the country.
But a majority of members of the Chamber of Commerce Hawaii — or 55% — reported in an October survey that they had already seen an increase of at least 7% in operating costs.
Trump’s tariffs also caused 10% of chamber members to lay off employees, and 54% “stated they are considering reducing spending on hires and staff,” said Sherry Menor-McNamara, the chamber’s CEO and president. “This is all centered around the tariffs. None suggested workforce training would help. It’s the financial strain of rising costs.”
Additionally, effective Jan. 1, Hawaii’s minimum wage will rise $2 an hour to $16, up from $14.
The pay increase will only “add to an already unpredictable situation,” Menor-McNamara said.
“We’ve already seen several small businesses closing their doors,” she said. “All of this collectively is making it much more challenging. I think 2026 will definitely be challenging, which impacts jobs and people in our community. Anecdotally, from the biggest businesses down to the smallest, we hear about the uncertain economic situation that’s increasing the costs of doing business. Small businesses, especially, don’t know what the next day will look like, or the next week, or next month.”
