Eric Gill

Wanting to become involved in organized labor as "tools of Hawaii’s people," Eric Gill dropped out of college after one year and chose a job as a hotel dishwasher as the deliberate avenue toward union leadership.

"I decided my personal efforts were better spent organizing workers as opposed to organizing students and others in the community," recalled Gill about his entry more than 38 years ago at Sheraton Waikiki, where employees were represented by the hotel workers’ Local 5 union, now called Unite Here! Local 5.

In a bitter contest in 2000, Gill narrowly unseated Tony Rutledge as the Local 5 financial secretary-treasurer, the union’s top position. He has held the position virtually unopposed since then.

His father, the late Tom Gill, was a U.S. congressman from Hawaii and the state’s lieutenant governor from 1966 to 1970. Brother Gary was a Honolulu city councilman and the other brother, Tony, is a labor lawyer.

His father, who was an attorney for Local 5, "never put pressure, positive or negative, on me in any directions," said Gill.

Nor does he regret the choice he made.

"The community’s interest depends on our successfully growing our union," he said. "We as a community have no other tool to secure the wages and benefits from this industry. The government really can’t do that. It can pass the living wage. It can do this or that. It can do a lot of things. There is no tool that the government has, but society has a tool, and that’s us."

Gill, 58, lives with his wife and five children at the Gill family property on Tantalus.

QUESTION: What are major issues for the hotel workers union?

ANSWER: The biggest issue we have here in Hawaii is not just for hotel workers but for the whole community.

Basically, what’s happening is the hotel industry has been converted into a real estate bubble — basically, the big bang in private equity funds and real estate investment trusts. These are the ownership entities that own all of our own hotels, not just the ones we represent. In the context of the equity markets being very volatile, unstable, they go up, they go down; you can’t make money in the stock market. You can’t make money on bonds; bonds are producing 1, 2 percent. My CDs are turning over one-third of 1 percent.

In the investment world, there is no good place to land. So what they’re doing is money is being funneled into commercial real estate and particularly into lodging. What that means is buying and selling of hotel real estate.

You may have seen articles a few weeks ago that this is a record year for hotel sales, and it’s being reported by the press as if this is something good, some new indication of a recovering economy, but it’s just not so. It’s an indication not of a recovering economy but of a desperate search for profits in the pockets of speculation that banks can make money.

So hotels are being bought and sold, and bought and sold. The problem with that, of course, is every time it’s bought and sold, it’s bought and sold at a profit — meaning the price goes up, the debt service goes up.

Q: The debt service?

A: The amount of loan. When you add 50 percent onto the amount of debt that the property is carrying, then that much more money from the operation needs to go to pay the debt, as opposed to pay for the food and the linens and the bills and the process of operating, including wages.

So when these banks … the debts go up, the debt service amounts go up — they have to pay more to service that debt. And the hotels, the same: It’s the same number of rooms and we’re running at 100 percent in Waikiki.

So the response then for the banks is to try to reduce their expenses in order to increase their cash flow to service the debt. They can’t cut their electrical bill because they won’t get a reduction. They can’t cut their water bill or their sewage bill. Their food costs are going up. So the only thing they can do is reduce services and cut staff, and that’s what they’re doing. We’ve lost 1,600 Local 5 jobs in the last six years.

Q: How many do you represent now?

A: Ten thousand. We’ve recovered some numbers. We organized a new group at the airport, for example. But basically some of the best jobs in Hawaii are Waikiki hotel workers (who) have a weighted average in terms of their total costs of employment at about $29 an hour. That’s what a hotel worker in Waikiki, if they’re under a union contract, makes, which includes roll-up costs, benefits costs and everything else. But that money that is paid to workers stays here in Hawaii.

When my members receive a paycheck, they go and spend it in the community. That’s not true of the debt service costs and the profit margins for these big global banks that know no home, no country; they’re global. They don’t care about any country or any community. So they’re (collecting) the profits off the top at the expense of not just my members but at the expense of Hawaii. So that’s a huge problem because we only have certain resources here. Our beaches are the resource that is providing livelihood in essence for the whole state. We’ve given these guys our beaches in order to get jobs, and they’re keeping the beach and downing the jobs.

Hilton, for example, last year eliminated room service (food delivery), a seemingly small move. Twenty-one jobs were lost in that elimination.

When you look at the government’s own multipliers in a way of calculating impact, the 21 jobs — which were good Local 5 jobs with full family medical, retirement medical, a real pension, the many benefits that come with our contract — those jobs have been eliminated. But if you look at government multipliers, it’s more like 45 jobs total loss and you can calculate that out at $4 million dollars a year lost to Hawaii. That’s just wages alone that would be spent in our communities.

So when we’ve lost 1,600 (jobs), much of that has been restaurant

closures, food-and-beverage retrenchment. As the banks have taken hold of our industry, they’ve abandoned the notion that as part of the hotel amenities they should have a decent restaurant. Many of them have cut the restaurant down to a single one, and not even offering three meals in some cases. So we’ve lost many, many workers to restaurant closures.

Q: How can the union cope with this?

A: The union cannot by ourselves cope with this. The private property rights that is the essence of American law restricts our ability to bargain over these things. This community needs to protect itself in such a way that it can regulate this real estate bubble that is being built in our most important industry. …

The basic scenario goes like this:

Hotel A is bought at X price. Five years later, that investment group wants its money out. They sell it at X-plus. At some point, the cash flow from the operation can’t support the note, and what they do is convert those hotel rooms to condos, and that’s what’s happening at the Ilikai right now. The Ilikai by the end of this year, depending on how things go, could be gone as a hotel. The last 200 rooms are proposed to be converted into condos and sold off on the condo market, which would eliminate the last 63 jobs in a building that once supported 600 good jobs in Hawaii. That hotel would be gone. That building will be time-share, condo. Some of the owners will market their rooms on the ‘Net and hire their cousin to come in for five bucks an hour to clean, that kind of thing. But good jobs you can build a family on, they’re gone.

The notion that, "As the banks and owners of these hotels go, so goes Hawaii" is just wrong. We cannot let these global predators spoil our communities, so we are looking for an ordinance that will lock up the back end.

Under American law, when you study it, you’ll find out how difficult it is to try to put a limit on what landowners can do. There’s zonings and other things that the community has developed over the years to protect yourself that are to be used that are not being used.

We have tools — but in terms of the rampant speculation, where these investor groups always have in their back pocket that they can get their money out by eliminating a hotel and turning into condos and selling in the condo market, we’ve got to close that back door. … Then global investors would have to realize that it’s not just piling on debt, and you can always get out by screwing Hawaii’s people, taking our jobs and selling our hotel rooms off as condos to rich people from somewhere else.

Q: Can you explain your opposition to the City Council approving "limited service" hotels in low-density, mixed-use areas of Honolulu, West Oahu and Central Oahu?

A: The Council has gone the wrong way. A few months ago they passed this Act 75, which just basically threw the door wide open for the construction of … limited service hotels on business mixed-use land. Limited service means no jobs. That’s what it means. It’s people who provide service. …

They’ve thrown open this whole swath of business mixed-use land so they don’t even need a permit, a conditional-use permit, to build these limited service hotels.

Wait a minute. We’re losing good jobs in the hotels we’ve got, and you’re saying you want to take visitors from there and put them over here in hotels that don’t provide jobs?

What kind of city leadership is that for our community? It’s shocking when you get close enough to it. … It’s just a bad idea. There’s nothing less reliable in terms of employment than a hotel that’s half-full, and the notion that we should just build more hotels, and more hotels is a good thing, is just fallacious.