The Indicator from Planet Money

Hawaii’s worker shortage goes NUTS

January 29, 2026

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  • The Federal Reserve Bank of San Francisco's Beige Book entry highlighted a labor shortage in Hawaii impacting the harvest of macadamia nuts and coffee, despite the state's low unemployment rate. 
  • Hawaii's labor market challenges are compounded by geographic isolation, making labor less mobile, and high costs (inflation, insurance) that restrict businesses' ability to raise wages significantly. 
  • The difficulty in harvesting macadamia nuts is exacerbated because many orchards are on steep volcanic slopes, necessitating labor-intensive hand-picking, leading farmers to seek mechanization solutions. 

Segments

Fed Beige Book Coverage Competition
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(00:00:15)
  • Key Takeaway: Federal Reserve districts are innovating coverage of the Beige Book, challenging traditional media.
  • Summary: The Minneapolis Fed is now producing a video version of its Beige Book entry, prompting the hosts of The Indicator from Planet Money to jokingly declare competition for their own coverage. The hosts frame their episode as a glamorous ‘Beige Awards’ salute to storytelling about the economy. This segment establishes the context for highlighting the San Francisco Fed’s winning story.
Hawaii Economic Mystery Introduction
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(00:01:17)
  • Key Takeaway: Hawaii faces an economic paradox of low unemployment alongside significant labor shortages in key sectors.
  • Summary: The episode focuses on an economic mystery highlighted by the San Francisco Fed in the Beige Book concerning Hawaii. Despite low unemployment, the state has high demand for workers, yet certain parts of the economy are struggling. This situation is described as ’trouble in paradise’ due to hiring difficulties.
Beige Book Award Presentation
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(00:03:13)
  • Key Takeaway: The San Francisco Fed won the top ‘Beige Award’ for its report on Hawaii’s macadamia nut labor issues.
  • Summary: The structure of the Federal Reserve System, involving 12 regional banks publishing local economic stories in the Beige Book, is explained. The Minneapolis Fed received runner-up for a quote on using temporary workers due to uncertainty. The main award went to the San Francisco Fed for its unusual anecdote about labor shortages affecting macadamia nut harvests.
Interview with Carl Bonham
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(00:04:40)
  • Key Takeaway: Labor mobility is low in Hawaii, and rising costs prevent businesses from simply increasing wages to attract workers.
  • Summary: Carl Bonham, running U-Hero at the University of Hawaii, accepted the award on behalf of the San Francisco Fed. He confirmed that labor is not easily mobile to the islands when the economy adds jobs. While low unemployment suggests wage increases, factors like inflation, tariffs, and struggling tourism limit businesses’ capacity to raise pay significantly.
Macadamia Nut Harvesting Challenges
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(00:07:17)
  • Key Takeaway: Macadamia nut harvesting in Hawaii is highly dependent on manual labor due to older orchards being planted on steep, volcanic terrain.
  • Summary: Jeff Clark, president of Hamakua Macadamia Nut Company, calls the nuts ‘mac nuts’ and explains the unique growing conditions on the Big Island’s volcanoes. The volcanic soil yields a superior, buttery taste, but the slope prevents mechanical harvesting, requiring workers to pick nuts by hand. Labor costs include paying visa workers around $20 an hour plus providing housing due to high real estate prices.
Future Strategy for Nut Farming
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(00:09:06)
  • Key Takeaway: The long-term solution for Hawaiian macadamia farmers facing labor shortages is replanting trees on flatter ground to enable mechanization.
  • Summary: Because hand harvesting is economically unsustainable, the industry is looking at replanting older orchards on flatter land. This shift will allow for the eventual use of harvesting equipment, moving towards necessary mechanization. However, this transition is slow because it takes a long time for new macadamia trees to mature and begin producing nuts.