In these days of financial meltdown, if you were wondering how our state economy is being wounded by the decline of our workforce, Mike Rota, vice chancellor at the University of Hawai'i community colleges, can tell you more.

As part of his job, he's been analyzing Hawai'i's workforce for 25 years. With lots of help from others, he's gathered data from various public sources to help us understand what's been going on. He calls it an Inconvenient Reality. I call it a shame.

Like Al Gore's Inconvenient Truth, it's the hard truth we really haven't talked about. The trouble Hawai'i has had in building and sustaining a qualified workforce is neither theoretical nor pretty. It affects us all, and it affects our state. It's time we faced Mike's Inconvenient Reality, and did something to deal with its continuing and escalating consequences.

WE CAN'T FILL THE JOBS WE HAVE

The demographic bell curve suddenly got two years older from the 2000 Census to the 2005 update. This is due to the departure of our young people for better work elsewhere. The kids leave at age 19, leaving us with a gap in their most productive years. Compared to the rest of the country, Hawai'i has a smaller percentage of people aged 18 to 45 who can staff our new industries — life sciences, biotech, infotech, film and digital media, diversified agriculture and energy.

Mike's charts show there have been 28,000 jobs to fill in Hawai'i every year for the past six years. Given the current financial meltdown, that number is likely to do a nosedive, but the point is that we have had a "worker supply gap" — an insufficient number of qualified workers to fill the jobs. Half of these jobs require education or training beyond high school, and we simply don't have the graduates with that level of education. What a loss — all those good jobs going begging.

Naturally, when you've been busy exporting the core members of your work force, you turn to importing new labor to the Islands. But that's not so simple in Hawai'i, where housing is no longer affordable. Since we no longer help imported workers with housing on any significant scale, as we did historically, we can no longer depend on getting them to come and to stay in Hawai'i. This alone takes the bottom out of things.

SITTING ON THE SIDELINES

A considerable number of people in Hawai'i do not participate in the work force. Some are disabled in a way that employers are reluctant to hire them. Most of those who stand on the sidelines are probably there because of a lack of education. There is a clear correlation between level of education and the likelihood a person will participate in the work force.

If you don't have an education, you're not likely to be qualified for a decent job. School doesn't only teach you skills — it teaches you confidence; how to show up; how to get the job done; how to get along in a company structure; how to respond to supervision and on-the-job training. If you've never succeeded in an educational environment, it's hard to fit into the work force at any level. No surprise there.

Unemployment in Hawai'i has risen from 2 percent to 4 percent in the past year, hastening recently. Why has this happened when there have in fact been more jobs? OK, so three quarters of the 28,000 jobs we've needed to fill have come open because of age and retirement. The remaining 25 percent of those jobs have come open because of job growth, growth we couldn't keep up with. The irony is painful.

NICKELED-AND-DIMED

Housing is more expensive here, but wages are lower. We've had a decline in per-capita personal income relative to the rest of the country since 1970. If you adjust for inflation, the decline is steeper. In 1970, our wages were 124 percent of the national average. If you adjust for cost of living, we were at the national average. By 2000, our wages were 95 percent of the national average. If you adjust for cost of living (which was 25 percent higher than the rest of the country), we made only 75 percent of the national average. This "price of paradise" makes it hard to live in Hawai'i and easier to leave.

Some employers are not troubled with this. The powers that be (let's call them the PTB) may prefer that we work our tails off, barefoot and pregnant. Tourism is dependent on a low-wage multiple-job work force. But the children of that work force won't stand for it; they'll sooner leave town than fold hospital corners and serve mai tais. Who can blame them? They don't want the treadmill their parents have had.

Although the low-wage multiple-job model is not sustainable, the PTB don't seem to want to improve it. That may be because the PTB have lost their own kids to the Mainland, so they rattle around in Ha-wai'i, isolated, with no continuing stake in the future and no vision for a better life here. Perhaps we need some turn-over in the PTB. Perhaps we also need a state Constitutional Convention and a shake-up.

PIPELINE OF UNDERPERFORMANCE

Hawai'i continues to fall behind in graduating 9th graders from high school and enrolling them in college by age 19. Those rates have dropped by double digits since the early 1990's. Eighth-graders perform poorly on national assessments in math, science, reading and writing. Hawai'i is among the lowest-performing states in science and reading. These kids are not prepared for challenging high school courses.

We do well in our rate of high school graduations, but we're far behind on student performance in skills critical to postsecondary education and jobs in the new economy. Hawai'i ranks in the bottom quartile in science, technology, engineering and math and is 30 percent below the national benchmark in work force preparation. Clearly, our kids are not qualified for the global market.

More disturbing, Hawai'i is 15 percent below the national benchmark on pass rates for teacher examinations, and we're having trouble training the teachers who will train the next generation of students. Hawai'i also ranks 35 percent below the national benchmark in preparing students for graduate study. It's the graduate study that will help them qualify for good tech jobs. What are we — and they — going to do?

NO EASY SOLUTION

Unless we get our act together, this dismal degeneration will continue. The Census projection shows a continuing out-migration with a continuing decline in critical population groups. Hawai'i is unlike other states — we're having a special decline based on our special low wages and our special high costs of housing and living.

This decline reduces our unemployment rate, but our low unemployment is not because our economy is strong. It's because of the absence of qualified workers. Ultimately, things will reach a tipping point when employers have to pay extraordinary costs to import qualified workers.

We've seen that in defense, nursing, construction and other sectors, where employers have had to import temporary workers.

At that tipping point, the work will go offshore, outsourced. Here's the progression: The kids leave; you don't have workers; you pay added costs to get the work done here, or somewhere else; your customers will not pay the added costs, so you close; this creates gaps in the economy; more people then leave town to get the goods and services they want. This is a spiral down a road to ruin.

Mike is right. What we're talking about is an inconvenient and intolerable reality. Next week, I'll give you a smorgasbord of possibilities to break the loop, and to see if we can't grow a work force that will meet the needs of a technology economy, assuming that's still possible.