Teachers, bus drivers, suppliers feel strike pinch

By Michele Kayal and Frank Cho
Advertiser Staff Writers

School bus driver Ken LeVasseur has been hitting the beach with his daughter Shyla these past few days to help with the boat she'll use in an upcoming regatta, dubbing the time off a "strike-ation" — like a vacation, only different.

But if the statewide walkout by Hawai'i schoolteachers and university professors goes on longer than a week, LeVasseur said, he and his wife, Marie, both of whom drive for Gomes School Bus Service, will apply to the state for unemployment benefits.

"The longer it goes on, the more I go in hock," LeVasseur said. "And we're not making any unnecessary expenditures, like going out to dinner, going to a movie. We'll get a DVD and bring it in."

The Department of Business, Economic Development and Tourism says the strikes are already costing Hawai'i $3.4 million a day in lost wages and benefits, an amount department director Seiji Naya characterized as small compared to the state's $40 billion economy.

But the LeVasseurs and hundreds of other families and businesses could get caught in the trickle-down effect. As the teachers and others rein in family spending, and the schools turn down goods and services from vendors, the effect will eventually begin to ripple through the state's already-fragile economy. Major banks began arranging lines of credit last week for people who may not be able to pay their mortgages. And school bus companies and other suppliers tried to steel themselves for what could be significant revenue losses.

"This is a pretty big chunk of relatively high wage-earners not getting paid or spending," said Hawai'i Pacific University economics professor Leroy Laney.

The state's nearly 13,000 public school teachers and more than 3,000 University of Hawai'i faculty walked off the job last week as bad economic news continued to flow from the Mainland and Japan, threatening the state's mainstay tourism industry with potential declines and adding to the generally uncertain economic outlook. Laney had already forecast the state's economy to grow only 2.5 percent in 2001 because of these factors, and he said a prolonged strike could cause him to drop that number another half-point.

The most direct jolt to the economy will come from teachers, many of whom have already begun to cut back on spending.

Standing on the picket line outside McKinley High School last week, college counselor Cynthia Kunimura said she cancelled her spring break trip to Las Vegas. Student counselor Donna Hesch and her husband have stopped going to the movies, and the newlyweds expect to dip into their small savings to pay the mortgage on the house they bought just six months ago.

Graphic arts teacher Lester Higa said he has already spoken to his credit union about deferring mortgage payments.

"I need to get a loan to pay our mortgage if it goes for two weeks," Higa said.

Bank of Hawai'i, the state's largest, will allow striking teachers and professors to miss up to three monthly payments on a case-by-case basis, said bank spokesman Stafford Kiguchi. The bank has also extended a $1 million line of credit to the professors' union, the University of Hawai'i Professional Assembly, which will use it to provide loans to its members.

First Hawai'ian Bank and American Savings Bank are also helping teachers on an individual basis with loans and deferred payments.

Local vendors stand to lose as much as $200,000 a day, the amount Department of Education food services director Gene Kaneshiro said he spends on groceries, paper plates, and plastic utensils for 180,000 daily meals. An additional $43,000 a day is spent on milk from Meadow Gold and Foremost Dairies, Kaneshiro said.

"There is a lot at stake here for the vendors," Kaneshiro said. "The vendors have personnel, they have warehouses, trucks, drivers and delivery people. They probably all will be impacted if this thing prolongs ... There is a lot of concern with this strike other than the teachers aren't getting any income."

Grocery supplier Y. Hata & Co. Ltd. is one of the school system's largest vendors, and the schools make up about 10 percent of its business, said Y. Hata sales director John Smiley. The company will start feeling the impact of the strike as early as Monday, Smiley said, as supplies intended for the schools remain stashed in warehouses or irreversibly in transit toward Hawai'i.

"We have products that have been brought in specifically for them, and even though it's not really earmarked, if they don't start pulling from it it won't have anywhere else to go," Smiley said. "If it ended this weekend, the impact to us would be minimal. But if it goes for another week, the impact on us is going to be pretty significant."

Roberts Hawaii, the largest school bus operator in the state according to company spokeswoman Sam Shenkus, has 1,000 vehicles and 400 drivers statewide. About 90 percent of those drivers, or more than 350, were out of work last week because of the strike, Shenkus said.

Shenkus said that if the strike ends Monday, the impact to Roberts will be minimal. She would not speculate on impact to the company if the strikes last longer.

"Right now it's not that major," she said. "The equipment is sitting. It's the drivers who aren't working."

Add to the potentially serious economic impact the damage such a strike could do to the already weak image of Hawai'i's public education system, where some say teachers are underpaid and students underperform.

"Our (adjusted income tends) to be below the Mainland because of our higher cost of living," said Naya said. He added that the strike could also affect efforts to change Hawai'i's sun-and-surf image to one that says its a good place to do business.

"(The strike) is very unfortunate," he said. "We had just begun to change the image to some extent."