Here's economist Paul Brewbaker's take on the local job situation:

This is one of those "the more things change, the more they stay the same" stories. If this was 1982, we would be Pittsburgh steelworkers, complaining that Japanese and Korean dumping was aggravating the severe beat-down the 1980-82 recessions had just dealt us (at that time, the worst recession since the Great Depression and, by some metrics, still worse than what just happened).

Each shock is an impetus to get even better at whatever firms do with fewer people, if possible. The same thing happened after 9/11. The more recent recession was another one.

Firms clearly (in Hawai'i for sure, at least on O'ahu) laid off too many people. On the one hand, shocks force businesses to raise the capital/labor ratio and commit to productivity-enhancing technology.

On the other hand, they subsequently wake up sooner than they planned and discover they have too few people to get the job done. On trend, fewer people are hired than were laid off, but the extra bodies find new and better things to do eventually. Actually, the way to think of it is that some resources (people) were "liberated" to produce other things. It's in that way that output and productivity (output per person) both go up, with a big "eventually."

The problem is that the adjustment process is painful. Economists generally recommend that efforts be placed in accelerating the adjustment process, rather than preventing the job loss.

One other point. Once upon a time a high school dropout could join the union and enjoy good pay and lifetime benefits with no education. Those days are forever gone, and a high school dropout in America in 2010 is not just relatively worse off compared to a contemporary college graduate, as was also true in 1980, a high school dropout in America in 2010 is absolutely worse off than a high school dropout in America in 1980 (his lifetime wages are lower today than would have been true 30 years ago, adjusted for inflation).

We all have to be smarter than we used to be, smarter than our counterparts were in the past, and at least as smart as everybody else on the planet: continuous learning and skill "upgrades" are the new constant, even if adjustments are by their nature disruptive.

Paul Brewbaker is principal of TZ Economics in Kailua and former chief economist for Bank of Hawaii.