Help Wanted - Hawaii's Economic Crisis




By George F. Lee, Star-Bulletin
They are fixtures outside the Hawaii Carpenters Union
office on Houghtailing Street:Idle workers who gather each
day to pass the time and wait for offers of work.



When the hammers
fall silent ...

About 300 Hawaii carpenters
have left the islands in desperate
search of work

By Peter Wagner
Star-Bulletin

There's usually a group of them hanging around the coffee pot at the Carpenters Union Local 745 in Kalihi, idle tradesmen looking for work, or at least a little solace.

They roam the quiet hallways with foam cups and the same dispirited expression. They sit. They read newspapers. They wait.

"I just come down here to pay my dues," said Roy Kojima, easing into a chair in the building's air-conditioned lobby. He's been unemployed for three years.

"I don't even bother checking the waiting list anymore."

The list, a long printout updated each day, hangs on a nearby wall. It carries more than 1,300 names.

The numbers are assigned in chronological order, so whoever's got No. 1 is up for the next job opening. You don't have to take it - the job might only be good for a couple of weeks and then you're back on the bottom of the list. You're allowed to pass on an offering a couple of times.

Kojima's got No. 21, but he's unmoved.

"Big deal," he said. "I could be No. 2 on the list, but if there aren't any job calls, what's the difference?"

Hard times in Hawaii's construction industry have hit the union like a ton of bricks.

Membership has dropped by 1,900 in the past four years. More than half of the remaining 6,800 members are unemployed.

It's been a long five years since the industry began to nose dive. And with revenues and permits off sharply again this year, it looks like more of the same in the near future, analysts say.

It's a vicious circle. If people can't afford to buy houses, nobody builds them. Not much of a future for a finish carpenter.

What do you think?

Some tradesmen with years of productive life ahead have opted for early retirement. The union some years ago traded its pension plan for annuities, so retirees draw on a limited resource.

Other union members - about 300 - have left for Las Vegas, San Francisco or Seattle, where ample work can be found.

One recent transplant, Roy Ragados, is hanging drywall in a Las Vegas convention center project. He sold his house in Maili and moved up to Henderson, about 20 miles from Las Vegas, in March.

"I like it very much," he said.

"A lot of people from Hawaii are coming down now. At first, I was pretty homesick because I didn't know anybody."

Ragados gets paid less - $22.38 an hour vs. the $28.60 he made in Hawaii - but he almost makes up the difference because Nevada has no state income tax, he said. "And the cost of living is lower."

Howard Silva, a Big Island carpenter who recently marked his first year in Las Vegas, is doing home repairs. "You have to get used to the heat," he said. "You miss the ocean, you miss your friends and there isn't the green. But there is a lot of work here."

His biggest stumbling block, Silva said, has been trying to sell his family's property in Hilo.

"I think this will point us in the right direction," he said. "Instead of going backwards financially every year, we'll be going forward."

Many in the recent wave of emigrants to Las Vegas find homes with the help of Stephen Lum, an attorney who set up shop there six years ago because the legal industry, like others in Hawaii, is struggling.

Lum, owner and operator of No Ka Oi Realty, manages about 370 homes for people from Hawaii. "The majority of people coming up now are looking for rentals," he said. "Before, it was relocation to buy a home, but a lot are renting because they don't have jobs. And they don't know how long they can last up here."

But many carpenters in Hawaii are lying low, living off their spouses or relatives and hoping the long dry spell will pass. They help out around the house, take cash-only side jobs, or sign on with a nonunion contractor.

"A lot of people start hitting the bottle," said Samson Mamizuka Jr., the union's field representative and former president. "It not only disrupts lives economically, but also wipes out family lives. It just wreaks havoc."

While nonunion contractors pay union scale - $26.40 an hour - they don't provide medical, retirement, or other benefits that push union wages to $40 an hour. Workers competing for the scarce jobs pay their own premiums, forgo vacations and hope the job lasts.

Mamizuka remembers the flush decades when tall construction cranes hovered over Honolulu job sites everywhere.

"We called them the state bird," he said. "Workers could write their own tickets. It's not like that anymore. Things came to a screeching halt about five years ago, and it's gotten progressively worse."

Now the cranes have flown to far-off places, like Shanghai, and housing projects have all but dried up.

"Before, contractors used to build whole tracts," Mamizuka said. "Now they sell 15 or 20 houses before they build them."


Architects facing lean
times are going solo

The building slump has sent many
looking outside the state for projects

By Jerry Tune
Star-Bulletin

More architects are moving out of Hawaii as companies downsize, and many of those who remain are operating by themselves, at home, at much lower incomes.

In 1991, American Institute of Architects in Hawaii had about 950 members; today that figure is 779.

"We did a survey in 1995 which showed that the number of small firms - from one to five persons - had increased, while the number of large and medium-sized companies had gone down," said Glenn Mason, president of the Hawaii chapter.

The median net income of the small firms in 1995 was only $48,000, which indicates many architects are working alone, Mason said. The net income in 1990 was $159,500.

In the current building slump, big companies are taking jobs normally done by medium-sized companies, which then take jobs from smaller companies, leaving this last group to suffer most.

With construction of hotels, office buildings and gap-group housing stalled, many architects rely on government jobs or a special niche.

"We've seen a lot of work from the Navy and Army, especially the Navy," Mason said. "There is a lot of housing development. The state has been a little slower (in getting out design contracts)."

Construction in Hawaii

Mason's firm, Spencer Mason Architects, has kept busy doing historical research, mostly for military bases in the Pacific. "Twenty-five percent of our gross is historic research."

Large companies have been going overseas to do resort work, but have an economic disadvantage against competitors from the mainland and Asia.

"None has the general excise tax burden that we do," Mason said.

The architects tried to get the state Legislature to waive the 4 percent excise tax for overseas contracts, since this business brings money into the state. The measure, supported by Gov. Ben Cayetano, got all the way to conference committee, where it was sacrificed to balance the budget.

Mason said the tax exemption will be taken to the Legislature again next year. "The state should do even more than the 4 percent waiver. In Australia, the government pays people to go overseas and market their services. We have to learn how to import money." (The Australian government pays air fare and hotel costs for prospective clients, Mason said.)

Outside venture capital is staying away from Hawaii because of the Hawaiian sovereignty issue, government red tape and the high cost of living.

Eight years ago, architects were all busy and brought in employees from the mainland, which was going through a recession, he said. Now the positions are reversed, and many of those same architects have headed home.

Despite the sluggish economy, Mason said, several large architectural companies have been hiring in the last six months. "Generally, we've stopped the backsliding. But nobody sees long-term improvement out there."

How has the slump affected you?

Ames Chow, Chiropractor

Ames Chow is so fed up with the demise of his profession locally that he is leaving his Kaneohe practice and returning to Molokai. Chow blamed the 1996 state Legislature for changing rules governing how much a chiropractor can charge and how many visits are allowed in workers compensation cases.

Loss of business hurt Chow because he was locked into a lease for the Kaneohe office. "My savings were wiped out; I had to move," he said.

Chow is moving to a 30-acre site at Mapulehu owned by his family, where he plans to improve the land and grow taro. He'll retain his Molokai chiropractic office but also plans to dabble in fishing to bring in extra money. "It will be a simpler lifestyle on Molokai."

Chow, 34, took out $150,000 in student loans to get his education and training to become a chiropractor. Now, after nine years in his practice, he's cutting back. "Society teaches you to accumulate knowledge for stability. But my advice is to never get into a profession controlled by politics, in part or in whole."

Dubious Distinction

Hawaii was ranked 98 out of
100 metropolitan areas in job growth
rom 1991 to 1996.

Source: Regional Financial Associates, Inc.




Wanted: Your comments
What needs to be done to help Hawaii emerge from
its prolonged slump? Write to us at Letters to the
Editor/Economy, P.O. Box 3080, Honolulu, HI 96802
or e-mail us at editor@starbulletin.com and share
your suggestions. Please include your
daytime telephone number.




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