In the early 1900s, Hatoma flourished as a skipjack tuna fishing port. At that time, the population of the island numbered in the hundreds.
In 1968, because of the declining economic viability of skipjack tuna fishing (partly due to decreased consumption of katsuobushi due to the use of MSG in its stead), katsuobushi (dried and smoked skipjack tuna) processing facilities on the island were shut down, but the demographic decline started well before this.
With the decline of its only industry, the population of Hatoma rapidly shrank. When the population of its only school fell to just a handful, the Taketomi authorities attempted to shut it down. The island residents, however, fought to keep the school open, and succeeded by using an innovative program: households take in the children from mainland Japan who, for reasons of stress or mental difficulties, could not attend a local school, and send them to the school on Hatoma. This program, called Kaihin Ryugaku（海浜留学） (foster homes), still survives to this day, and the school's doors remain open.
Being a small, outlying island, infrastructure was slow to come to Hatoma; the island did not receive electricity until the 1960s.