Oct. 22—ABC Stores President and CEO Paul Kosasa says it's been an uphill battle as the company tries to bounce back from the COVID-19 pandemic.

The retailer, which is heavily concentrated in Waikiki, had to furlough nearly all of its employees when the visitor industry shut down in 2020 and is now short about 250 people, or 25 % of its workforce, with most of its more than 70 stores now reopened.

And the company has had to increase its payroll about 15 %—more including benefits—with signs now on its storefronts offering pay up to $17 an hour.

"It's been a struggle, " Kosasa said. "I think we're not alone, and that's why we put out that poster to try to lure and advertise for potential applicants to join our company."

Hawaii's labor force has been shrinking even as the unemployment rate has been declining. The drop in the labor force has been mainly caused by people either moving out of state, being discouraged and not looking for jobs, or unwilling to return to the workforce in the midst of the pandemic.

But the encouraging news is that those who want to work are sometimes getting higher pay than pre-pandemic wages. And the state's unemployment rate, which during the early stages of the pandemic hit a record 21.9 %, has now fallen eight straight months to an 18-month low of 6.6 % in September, according to data released Thursday by the state Department of Business, Economic Development and Tourism.

The seasonally adjusted jobless rate declined four-tenths of a percentage point from 7 % in August.

Hawaii, which like much of the country has been experiencing difficulty finding workers, saw its labor force shrink by 500 people to 646, 850 last month from 647, 350 in August. The labor force includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed.

However, the number of people employed rose to 603, 850 from 601, 800, while those unemployed fell to 43, 000 from 45, 550.

"The numbers indicate that our labor market conditions continue to improve, " DBEDT chief economist Eugene Tian said in an email. "A worker shortage may exist in some industries but other industries may not be as serious. A worker shortage implies more demand (job openings ) than supply (labor force )."

The last time that Hawaii's jobless rate was lower than 6.6 % was in March 2020 when it was at 2.1 %. The state's jobless rate still trails the monthly U.S. rate, which fell in September to 4.8 % from 5.2 %. However, Hawaii continues to distance itself from a string of months during the pandemic when it ranked among states with the highest unemployment rates.

As of August, Nevada had the highest jobless rate of 7.7 %, with California next at 7.5 %, followed by New York at 7.4 %. The U.S. Department of Labor will release the September numbers for all the states today.

Kosasa said while ABC's starting wage is $15 an hour, the starting pay could bump up to $17 an hour if the employee works in the deli or is able to work at nights. A sign on the door at the ABC store at Kuhio Avenue and Lewers Street in Waikiki says the company is now hiring sales associates, deli clerks and baristas. Before the pandemic began, ABC's starting pay was $13.50 an hour, Kosasa said.

He said the company hasn't mandated vaccines for employees, but is urging everyone to get vaccinated. "We're about 95 % vaccinated, " he said. "It's really good, but we want to be 100 %, of course."

Kosasa said that when ABC's business started to recover, it brought back as many employees as it could. "But obviously, there was a net loss of employees, " he said. "The plus-up additional payments from the federal government may have played a role in keeping people from going back to work."

Kosasa likened the pandemic experience to being far behind in a football game.

"It's like you're ... on the losing team and it's like 50-0, " he said. "You're hoping, you keep at it and maybe you score some points. And then you score a little bit more, and time doesn't run out. ... You're trying to come out with the best outcome and have a moral victory." Still, Kosasa pointed out that COVID-19 is a daunting opponent.

"There's vaccinations and those kind of things, but you're dependent on many other entities to work together and try to maintain the health of our community and bring back the commerce which is part of our community to thrive, " he said.

"So we're making some first downs, but every once in a while you have to punt and then try to get the ball back and score. As time goes by, certain things are happening. International travel is supposed to reopen. That's like getting a first down. ... You've got to stay optimistic."

City Mill President and CEO Steven Ai said his company is also looking to hire more employees and has openings for about 40 people at eight stores on Oahu.

"On top of that, we have had a number of longtime team members that have retired during this COVID period, and those people were very well versed in product knowledge, know our company and know our customers. They knew how to take care of customers the way City Mill takes care of them, " Ai said. "We pride ourselves on customer service. Not having enough people does provide a burden on those still in the organization. I have a lot of respect for all the people who are staying."

Tian said he expects the state's unemployment rate to continue dropping.

"The statewide unemployment rate is expected to be below 6 % by the end of this year and we expect the unemployment rate will be around 5.5 % next year, " he said.

In another measure of the state's unemployment, total nonagricultural jobs increased in September by 100 over the previous month. The largest gain was in the education and health serv ­ices category with 700 additional jobs.

Nonagricultural payroll jobs are calculated from a mail survey of employers and are considered a better indicator of job growth due to its larger sample size than the labor force data, which is compiled from a telephone survey of households. In the payroll count, one person might be counted multiple times if that person has multiple jobs.

"In September, non-ag payroll jobs increased only 100 while employment increased by 2, 050, " Tian said. "This implies that more self-employed people returned to their businesses."

The jobless rate fell in the state's four major counties in September from the previous month. State and national labor force data is adjusted for seasonal factors, but the county jobs data does not take into account variations such as the winter holiday and summer vacation seasons.—