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Local Economists: Best Solution is to Get Federal Loans, Not Cut State Worker Pay

April 21, 2020

Today, HGEA Executive Director Randy Perreira sent a letter to Gov. Ige reaffirming our Union's opposition to drastic furloughs and pay cuts for government employees and strongly urging him to consider borrowing from the Federal Reserve as a short-term revenue replacement tool.

His letter highlights a report by the University of Hawaii Economic Research Organization (UHERO) that describes this funding mechanism. The UHERO report also states, "We cannot overstate the tremendous adverse impact that a sharp contraction in government spending will have on the Hawaii economy, and the corresponding positive effects that sustaining public spending will confer."

UHERO's report outlines that a preliminary analysis suggests a cut of 20% to State salaries would lead to a drop in Gross Domestic Product of $3.3 billion over the 2020-2022 period. "The long-term consequences of a prolonged, high rate of unemployment is a deterioration in health outcomes and a decline in worker productivity and wages that could potentially last for many years.

As HGEA has been saying, it is important to continue funding the government workforce as we are one of only two sectors of the economy still able to contribute. This new report backs up our position.

HGEA continues to fight for our members. We will keep you updated through eBulletin and the HGEA website.

Read Randy Perreira's letter to Governor Ige here.

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