Unions tested even in labor-friendly Hawaii

Even in the bluest of states, Hawaii’s government employee labor unions are swallowing pay cuts and deep benefit reforms brought on by the state’s financial troubles.

But they aren’t fighting the changes much, with the state’s largest union tentatively accepting a 5 percent salary reduction and broad overhauls of retirement perks that brought fierce opposition in previous years.

Union leader Randy Perreira said even though Democrats control most of the state’s elected offices and unionization levels are among the highest in the nation, workers understand that long-term costs must be contained.

“The proposed changes are things that ideologically, we union guys don’t agree with,” said Perreira, executive director for the Hawaii Government Employees Association, the state’s largest public employee union representing more than 28,000 active workers. “But you’ll notice that we haven’t stepped up in opposition, simply because we realize these changes may be necessary.”

That’s a far different approach than in states like Wisconsin and Ohio, where labor unions loudly protested limits to collective bargaining rights supported by those state’s Republican governors.

Unions are quieter in Hawaii not only because the state has a labor-friendly Democratic governor, Neil Abercrombie, but also because threats to their basic collective bargaining rights were quickly shot down, and a 5 percent cut to their base pay is an improvement from the 10 percent reduction and two monthly furlough days they took over the last two years.

Unions are beginning to understand that heavy labor costs, paid for by taxpayers, will undermine their power in the long run if they don’t compromise, said Sen. Sam Slom, the only Republican in the 25-member state Senate, who wants to spend less government money on unionized workers.

“The leaders of the unions are very aware that these problems are serious,” Slom said. “All of these union problems are not unique to the mainland.”

Public workers showed their concern when several hundred of them rallied last week with chants and signs proclaiming they “stand with Wisconsin,” a display of unity, power and influence at the Hawaii Capitol, where mostly Democratic lawmakers they helped elect do business.

The demonstration was meant to show elected leaders their opposition to fundamental labor reforms in Hawaii when they believe they’ve already sacrificed enough during an economic downturn that has hit their paychecks.

“Look at the toll budget cuts are taking on our police officers,” said Kimo Smith of the State of Hawaii Organization of Police Officers at the rally. “We’re not just numbers on a piece of paper.”

Union strength in Hawaii grew in the 1940s and 1950s, when workers for sugar plantations, hotels and other industries launched strikes and protests over conditions and pay that resulted in Democrats taking control of the state Legislature in the 1954 elections, where they’ve remained in power ever since.

Today, Hawaii is the third-most unionized state in the nation, with 22 percent of workers being members of labor unions in 2010, behind only New York at 24 percent and Alaska at 23 percent, according to the U.S. Bureau of Labor Statistics.

“We have a fairly high percentage of workers in unions that hasn’t resulted yet in a high level of militancy,” said Eric Gill, secretary-treasurer for Unite Here Local 5, which represents hotel and restaurant employees. “There’s a great potential for Hawaii workers to gather their union rights, build their leadership and become far more assertive in the community than we are now.”

Labor costs account for about 70 percent of Hawaii’s state government spending, putting unionized workers in the middle of a political struggle as lawmakers try to balance a budget with a projected $1.3 billion deficit over the next two years.

The most serious legislation shrinking union rights would have made public worker health premium costs nonnegotiable, permanently setting them at a 50-50 split between the employee and the government. That bill didn’t advance, and the tentative agreement with HGEA calls for evenly divided health contributions anyway.

What remains are proposals aimed at getting long-term labor costs under control by raising the retirement age, mandating higher contributions to pension plans, eliminating overtime pay from being used in pension calculations, increasing the vesting period and ending state reimbursements for Medicare Part B payments. These initiatives, projected to raise more than $440 million over the next five years, would affect only future hires.

Unions aren’t strongly opposing these measures intended to address a $7 billion unfunded retirement liability, a stark shift from just two years ago, when more than 200 government workers packed a hearing to combat similar proposals.

“It’s been much less acrimonious because the unions didn’t feel like there was a fundamental principle at stake,” said Rep. Karl Rhoads, the chairman of the House Labor Committee. “It’s about the money, and they can read the handwriting on the wall as well as anybody.”

The financial challenges facing government workers transcends political allegiances, although states with Democratic governors like Hawaii are more likely to seek piecemeal changes in union benefits rather than sweeping reductions in union power, said William Puette, director for the Center for Labor Education and Research at the University of Hawaii-West Oahu.

“If you set the political diatribes and acrimony aside, we are facing some of the same issues as the mainland,” Puette said. “It puts a lot of pressure on whoever the governor is, friend or foe to the labor union movement, when these issues come forward.”

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Online:

HB1038, HB1041: http://capitol.hawaii.gov/