Bus strike won't do quick damage to economy

By Sean Hao
Advertiser Staff Writer

The shorter, the better.

Bonham

Kim

Brewbaker

Laney

"If we get out of this in a couple of weeks, it's not clear to me that it will have significant impact on the economy," said University of Hawai'i economist Carl Bonham.

"A dock strike for three weeks would have a bigger impact than a three-week bus strike," Bonham said.

Losses likely would come through lower productivity and higher transportation costs, among other effects, Bonham said.

Some areas of the island and lower-income earners, the elderly and handicapped who rely heavily on the bus could be disproportionately affected by the walkout.

In Waikiki, for example, where many of the 32,000 workers ride the bus to work, productivity might decline if workers are stranded or arrive late.

That doesn't mean tourism itself would be hurt; the industry has proved resilient in the wake of terrorist attacks, the war on Iraq and the SARS epidemic.

Although international arrivals remain sharply down, Mainland visitors to Hawai'i have rebounded, and the remaining softness in the the economy has been offset by low interest rates, a strong housing market and robust construction activity.

As a result, the effect of the bus walkout could be largely muted.

"The real impact will be on the transportation of workers in the hotel industry," said Karl Kim, a professor of urban and regional planning at UH.

Interruption of O'ahu's mass-transit system will mean more people driving and more money spent on transportation. But people and businesses likely will adapt to life without TheBus over time, experts said.

"I have a hard time believing that this will be a significant issue for tourism, given that this doesn't go on for several months," Bonham said.

If the strike drags on — and TheBus' 1,300 drivers say they are prepared to stay out for three months — it could take a greater toll.

Strike benefits and any unemployment claims approved for drivers will cover a portion of their salaries and preserve a part of their buying power. But if the walkout is extended, those benefits will lapse.

The economic contribution of bus fares also would shift to other areas of the economy.

Last year, about 201,000 passengers a day took public transportation on O'ahu, according to the Department of Business, Economic Development and Tourism. They spent an average of 42 cents, or $84,420 a day. Much of that money would be put to other uses.

The strike also will take a personal toll, which could lead to political pressure to resolve the problem, said Paul Brewbaker, chief economist at Bank of Hawaii.

"That extra half-hour (drive) in the morning and in the evening —that comes out of your family time," Brewbaker said. "It's worth more to you. You start adding that up day after day, month after month, and that's a lot of time."

One positive result to come out of the strike could be growing awareness of the need for substitute transportation systems, Kim said.

"It would be nice if we came out of this with more people walking, biking and searching out alternative methods of transportation," he said.

But walking isn't an option for many riders, said Hawai'i Pacific University professor and economist Leroy Laney, and mass transit requires large outlays of public money.

"If you live in Hawai'i Kai, you're you're just not going to want to walk downtown," he said. "There are a lot of economists that aren't in favor of mass transit because a lot of mass-transit systems don't pay for themselves.

"I don't know of many silver linings that will come out of this, other than higher incomes for some segment of the economy."

Bonham said the solutions needed to end the strike could hit bus riders in the pocketbook.

"When all this is said and done, it's going to cost more to ride the bus," he said. "For some segments of society, that increase is going to be more harmful."

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.