Rising costs affect supplier, customer
By Dan Nakaso, John Duchemin and David Butts
Advertiser Staff Writers
But businesses on both ends of the Stanley's economic chain are also seeing rising costs — which could increase the prices Stanley's suppliers charge for their chickens and decrease the amount bought by customers.
Advertiser library photo • 2001
At Hee Hing Restaurant, Lee will see the minimum wage rise in January from $5.75 per hour to $6.25 per hour. Insurance costs also are rising, reflecting a nationwide trend caused in part by insurers trying to make up for recent losses by increasing premiums.
Brent Hancock’s chicken business is affected by rising costs for everything from feed to packaging. Pacific Poultry is the sole supplier of Stanley’s Chicken Market.
And the costs of some goods are also rising.
"I just got a letter from Coke that their prices are going up 5 percent because the cost of corn syrup has gone up," Lee said. "We need to make sure that our bills get paid and our employees stay employed. It's not a good time to be expanding."
Meanwhile, at Kalihi chicken slaughterhouse and processing plant owner Pacific Poultry, which is the Kinoshitas' only chicken supplier, increased shipping costs.
In addition, other rising expenses will push the price for a ton of chicken feed up to $320 from $300, said co-owner Brent Hancock. The price for plastic and cardboard packaging is also going up.
Hancock and brother Jaren will also be affected by the minimum-wage hike. They expect to pay $50,000 more in salaries, taxes and other costs in 2003 to increase the wages of most of their 90 workers.
"With the total spiral of increases that everybody faces because of labor and utilities and taxes and insurance," Hancock said, "If we can maintain the status quo, we'll be happy."
With prices seemingly rising all around, Kinoshita fears he'll have to dip into his family's cash reserves — possibly to buy a new place, with new chicken display cases, to save on rent costs.
With the Kinoshitas' prospects at Stanley's so uncertain, the family is lucky to have other sources of income, from family members in industries that not only fared better in the last year, but also have rosier outlooks for 2003.
Like many families in Hawai'i, the extensive Kinoshita clan is spread across many sectors of the economy. This has helped cushion them from sector-specific shocks.
If one family member or business hits hard times, the more fortunate often help him or her along. Like a diversified stock portfolio, this familial risk-sharing may help explain why Hawai'i's "job recession" of 2002, in which the economy lost an estimated 0.5 percent of its jobs, was surprisingly limited to sectors directly impacted by tourism's fall, while other industries either held steady or added workers.
Economists say the state's "surprising resilience" was reflected in the fact that inflation-adjusted personal income continued to rise even as the job count dropped.
Next: Help from healthier sectors of economy
