Study: Hawaii Could Add Jobs with Less Regulation

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A study for the U.S. Chamber of Commerce finds tabs Hawaii’s employment regulations as meriting a “poor” rating, with the policies and regulations inhibiting job growth and business formation.


The business advocacy group had consultants survey states’ labor and employment regulations along with developing an index to show the cost of regulations. It found 15 states merited a good ranking, 20 were fair and 15 were poor.

“States with the heaviest regulatory burdens are sacrificing opportunities to reduce their unemployment rate and generate new business startups,” said the report, which noted Hawaii had a “difficult environment” for new job growth.

It said Hawaii could have employed thousands more people and had more businesses being formed here if the regulations were relaxed.

The Chamber came up with an Employment Regulations Index which included 34 factors against states were measured. Hawaii received poor marks in many areas under this, with the state receiving low scores for having its own employee layoff notice law, minimum wages that can exceed federal levels, and not being a right-to-work state.

States with a good rating had what the Chamber said were strong pro-employment policies, while those with a fair rating had some good policies but fell short in a number of areas.

It said those with a poor rating have policies that inhibit job creation in most categories but could add to job growth by adopting less burdensome policies.

Based on this, the report said Hawaii’s 2009 unemployment rate of 6.8 percent could have been reduced to 6.2 percent if it had a perfect Employment Regulations Index score. That translates into 3,707 more jobs than the state had during the year, according to the report.

It also found the number of new businesses would have grown over what were formed during the year.

Instead of just 2,022 new firms being formed, it said 2,269 would have been created.

The full report can be found at:

Other states scoring poorly included California, Connecticut, Illinois, Maine, Massachusetts and Montana.

Also in the poor category were Nevada, New Jersey, New York, Oregon, Pennsylvania, Washington and Wisconsin.

States with good ratings were mostly in the South or Midwest and included Alabama, Florida, Mississippi, Virginia and Utah.