Posted on: Tuesday, May 14, 2002
Forbes says state bad for business
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By Dan Nakaso
Advertiser Staff Writer
Forbes magazine, which once labeled the state "The People's Republic of Hawai'i," again fires criticisms in "Trouble in Paradise ... Why doing business in Honolulu has become nearly equivalent to suicide."
The most recent article, by Lynn J. Cook in the May 27 edition, details a litany of problems, from high shipping costs, to an 8.25 percent personal income tax on the richest people, to the requirement that employers provide medical insurance to employees who work more than 20 hours.
"The state taxes everything that moves," writes Cook, who ends with: "Fidel Castro would feel right at home here."
Tourism, business and city officials will meet today to discuss a point-by-point rebuttal to the article, said Mike Fitzgerald, president of Enterprise Honolulu, a non-profit economic development organization.
"They certainly make some innuendoes and statements that are unfounded and exaggerated and almost vitriolic," Fitzgerald said. "But we've got to start dealing with these challenges in a thoughtful and measured way."
The 850,000-circulation magazine has made unfavorable evaluations of the Islands' political and economic climate before.
It spotlighted Hawai'i as far back as 1983, when it blamed "a powerful political and labor-union bureaucracy" for "smothering attempts at industrial development."
A decade later, Forbes ranked Honolulu last of 60 cities for business attitude and innovation.
The 1997 "People's Republic of Hawaii" piece called it a "semi-socialist welfare state."
"Hawaii is a nice place to visit," the author wrote, "but you wouldn't want to do business there."
Three years ago, Forbes ranked Honolulu 160th out of 162 metropolitan areas for development of high-technology business. In 2000, Steve Forbes, the magazine's president, CEO and editor-in-chief, called Hawai'i "one of the most over-taxed states in the Union" at a Hawai'i gathering of state and Asian business leaders that had Gov. Ben Cayetano in the audience.
In all those years, "things have just gotten worse," said Rep. Colleen Meyer, R-46th (La'ie, Waiahole), who is quoted in the latest article. "Maybe they're just astounded that a state operates the way we do."
Tim Lyons, executive vice president of the Hawaii Business League, understands the frustrations of business people in Hawai'i. But he also believes that Forbes writes about Hawai'i in part because of its Democratic politics and strong labor unions.
"We're an easy target to pick on, a desirable target," Lyons said. "There's still a stigma that Hawai'i and business just don't go together."
Cliff Slater, a director of the Tax Foundation of Hawaii, blames government leaders for drawing national media attention with such proposals as the country's only gasoline price cap.
"People walk around and shake their heads," Slater said. "How are you ever going to attract business that way? It's not that we even voted for it — it's that we would even seriously consider it."
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.
