Hawaii’s worker shortage goes NUTS - The Indicator from Planet Money Recap

Podcast: The Indicator from Planet Money

Published: 2026-01-29

Duration: 9 minutes

Guests: Carl Bonham, Jeff Clark

Summary

Hawaii is facing a labor shortage impacting its macadamia nut industry, as discussed in the recent Beige Book. The episode explores the unique challenges of recruiting workers in the islands and the impacts on local agriculture.

What Happened

Hawaii's economic landscape is currently facing a significant labor shortage, particularly affecting its macadamia nut and coffee industries. This issue was highlighted in the latest Beige Book entry by the San Francisco Federal Reserve. The unemployment rate in Hawaii is an exceptionally low 2.2%, but businesses are struggling to find skilled workers due to geographic isolation and an immobile labor market. The high cost of living and other economic pressures also prevent wages from rising enough to attract workers from outside the islands.

The episode features Carl Bonham from the University of Hawaii Economic Research Organization, who explains that Hawaii's location makes it difficult for workers to move there quickly when job opportunities arise. This geographic challenge, coupled with rising costs from inflation and tariffs, pressures businesses to find innovative ways to attract labor without significantly increasing wages.

Jeff Clark, the president of Hamakua Macadamia Nut Company, describes the labor-intensive process of harvesting macadamia nuts, which are mostly gathered by hand due to the volcanic terrain of the Big Island. This method is not only laborious but also costly, exacerbating the impact of labor shortages on production.

To combat these issues, there are plans to replant macadamia trees on flatter land, allowing for mechanized harvesting, which could reduce dependency on manual labor. However, this solution is long-term, as it takes several years for new trees to mature and become productive.

Despite the labor challenges, Hawaii remains a popular tourist destination, although spending patterns have shifted. Visitors are opting for less expensive activities, impacting local businesses that rely on tourism.

The episode concludes with a humorous note on the cultural adaptation of economists in Hawaii, as even serious professionals like Carl Bonham wear colorful Hawaiian shirts, highlighting the unique blend of business and culture on the islands.

Key Insights