Nick Severson came to Hawaiʻi from Philadelphia five years ago to use his law degree to help those less fortunate. Now the 33-year-old public interest lawyer faces hard times himself, laid off from a new job with a federal housing agency not long after he started it.

After working for the Legal Aid Society of Hawaiʻi, Severson moved over to the U.S. Department of Housing and Urban Development in January.  Now he’s a casualty of President Donald Trump’s orders to slash federal jobs, one of an estimated 2,200 local government workers that University of Hawaiʻi economists expect to be laid off in Hawaiʻi in the short term.

It’s a grim reality for Severson; his wife, a public school behavioral specialist, and their 7-month-old daughter. But Severson said he’s relieved to know his fate after a month of waiting for formal word that Trump was axing his job.

“When I finally got the email I was kind of numb to the whole thing,” he said.

Hawaiʻi economists are bracing for a small army of unemployed workers like Severson. Hawaiʻi’s workforce of some 637,700 included 35,500 federal employees as of December, data from the U.S. Department of Labor’s Bureau of Labor Statistics shows. For perspective, that nearly equaled the 40,000 workers employed in Hawaiʻi hotels during that period. 

The loss of jobs like Severson’s poses clear, near-term risks to Hawaiʻi’s economy. In addition, hundreds of additional, high-paying academic research jobs may be heading toward a cliff.

The University of Hawaiʻi Economic Research Organization puts it bluntly in a UHERO forecast for the first quarter of 2025 set to be released Friday. Combined with other federal policies, Trump’s jobs policy “places the Hawaii economy at risk of recession over the next few years.”

“It’s not quite as bad as Covid,” UHERO’s executive director, Carl Bonham, said of the likelihood that Hawaiʻi’s economy will shrink. “But it’s pretty bad.”

Construction And Tourism Remain Strong

The outlook isn’t all bad. Construction work, including the rebuilding of Lahaina, should drive that industry’s employment to a peak of more than 40,000 workers in 2026, UHERO forecasts. A wildfire litigation settlement is expected to put about $3 billion into the hands of fire victims.

Tourism numbers also are stable and could see a short-term boost of domestic visitors because the U.S. economy remains strong, Bonham said. State tax policies could give residents more spending money. 

Bonham said even strong industries like construction face headwinds, however, as threatened tariffs could increase building material prices and immigration policies could hit the labor market hard.

Also at risk is $1.6 billion in disaster recovery funding awarded to Maui County for new housing and infrastructure after the 2023 wildfires. The funds are central to the island’s rebuilding and long-term recovery efforts. 

Much depends on whether Trump’s policies prove to be real or, as Bonham put it, “a mirage.” But even fear of policy changes can create problems, Bonham said.

The federal Office of Community Planning and Development, a division of HUD, is charged with managing the award to the county, providing reimbursements based on receipts as work is completed. The administrator of Maui County’s Office of Recovery, John Smith, characterized concerns over potential delays in the grants as conjecture.  

But the Trump administration has targeted the federal office’s staff to be pared back by 84%, The New York Times reported earlier this month.

It all adds up to create a negative outlook for UHERO, which has cut its growth forecast for the state by half in 2025, to around 1.5%. 

“Is that low enough?” Bonham said. “We’ll find out.”

UH Could Lose 1,200 Jobs

Tracey Gotthardt moved to Hawaiʻi from Alaska with her two kids about a year ago to work on efforts to conserve the Hawaiian honeycreeper — a forest bird known for its curved bill — for the U.S. Fish and Wildlife Service. Gotthardt had two weeks left on her probationary period when her pink slip came. Now she’s out of work.

Probationary workers were the first to go, and for many agencies, a year of probation — or more — is standard, even for transfers within an agency. Although a California judge Thursday ordered Trump to rescind the mass firings of probationary employees, that did not appear to include those already let go.

“I quit my job in Alaska. I moved my whole enterprise here — me and my two children — and started a new life,” said Gotthardt, who is 61. “And they just pulled the rug out from underneath us.”

She’s hoping to land a job again within the next six months, in Hawaiʻi or elsewhere. She’s on a deadline, given that her kids are 11 and 14 and still in school. 

“If I have to make a course correction, I need to do it before school starts in August,” she said.

The challenge for economists like Bonham is tallying the total loss of federal jobs like Gotthardt’s. Anecdotes abound, but data is scarce. Bonham’s team estimates a loss of 2,200 jobs in the short term, which he said is just a “first cut” prediction that could increase.

UHERO’s number doesn’t include the up to 1,200 workers whose jobs are at risk at the University of Hawaiʻi, says Vassilis Syrmos, vice president for research and innovation of the university system.

Syrmos manages UH’s research grants programs, which bring in hundreds of millions of dollars annually from outside the state. These include federal grants from entities such as the National Institutes of Health, the National Science Foundation and National Oceanic and Atmospheric Administration. 

Syrmos said about half of the 1,600 or so grants are at high risk, including ones in areas where UH excels, such as atmospheric and ocean sciences, and alternative energy. 

“These are things this administration has no appreciation for,” Syrmos said.

In the worst case, he said, lost grants could affect 1,200 UH workers and mean $8.2 million in lost monthly payroll. A less dire forecast still could mean 200 to 300 job losses and $2.2 to $2.3 million in monthly payroll, Syrmos said.

Syrmos said UH officials want to keep the public informed but not create undue alarm. But he said the consequences could be stark for UH, which is one of Hawaiʻi’s most important employers and economic engines. 

Some people don’t know whether they’ll have jobs two to three months from now, Syrmos said.

“It is a traumatic experience,” he said. “This may be catastrophic.”

Nonprofits Brace For Impact

Safety nets are limited. For example, Syrmos said UH has some reserve funds that could help create a soft landing for some workers. But he said collective bargaining agreements limit how administrators can use the funds.

In addition, Gov. Josh Green earlier this month created Operation Hire Hawaiʻi, to help people impacted by layoffs, resignations and the loss of federal funding shift to state jobs. It could be a win-win since nearly a quarter of state government positions in Hawaiʻi are vacant.

There’s a caveat, though: Federal jobs typically pay 40% more than equivalent state jobs, not just because of higher base salaries but also because of benefits that include a 20% cost-of-living adjustment for federal workers in Hawaiʻi. As a result, the average federal compensation is $140,000 compared to $100,000 for the state, including medical and pension benefits.

Meanwhile, the state also could be facing cuts in federal funding, which makes up about $3.5 billion of  the $20 billion state operating budget. Any cuts to that funding could reduce the state’s ability to hire.

Nonprofits also are bracing for an impact. During a 35-day partial government shutdown in 2019, charities on Hawaiʻi island saw an immediate increase in the number of people needing help paying for food and gas, said Kristin Frost Albrecht, executive director of The Food Basket.

“It was a wake-up call for us as to how many federal workers work on our island,” Frost Albrecht said. “There’s a lot of them, and a lot of them live month-to-month like many residents do. They’re gonna need help.”

For now, Severson said he and his family can get by on savings. But, he said, if he can’t find a job in the longer term, “We’d have to make some choices about our future.”

Civil Beat reporters Ben Angarone, Jessica Terrell and Kevin Dayton contributed to this story.