The UH settlement was reached Friday, virtually on the eve of the walkout scheduled for today. It was evident several days in advance that the major issues - 4 percent pay increases in each of the next two years and division of income from intellectual property between the faculty and the university - had been resolved. The remaining issues hardly constituted sufficient cause for a strike. The agreement should give the governor and his negotiating team confidence that they can resolve issues in negotiations with other unions.
In contrast to the dark mood when Cayetano took office two years ago in the midst of a state fiscal crisis, the governor now feels that the state can afford modest pay increases for government employees. The teachers have grown exasperated with the state's intransigence - they have worked without a contract since June 1995 - but the administration's position has been softening. This is a result of modest increases in state revenues as the economy slowly gains strength.
None of this means that the state can afford to return to its old free-spending ways. The economic recovery is painfully slow and money is still tight at the state Capitol. But the UH contract settlement is a sign of improving times.
With many people in the private sector experiencing hard times as shown by record numbers of bankruptcies and foreclosures, this is no time for extravagant contract demands for state employees. The teachers may deserve a hefty raise, but they may have to settle for less.
Government should confine itself to educating and training welfare recipients to prepare them for employment. Its attempts to manipulate the labor market may only make matters worse.
The scanner is a coup for the islands and the Pacific rim. It is an encouraging sign that Hawaii could maintain and even enhance its reputation of being the "Health State" into the next century.

Rupert E. Phillips, CEO


John M. Flanagan, Editor & Publisher


David Shapiro, Managing Editor


Diane Yukihiro Chang, Senior Editor & Editorial Page Editor


Frank Bridgewater & Michael Rovner, Assistant Managing Editors


A.A. Smyser, Contributing Editor