The state’s drawn-out struggle to privatize Maui’s failing public hospitals is a telling gauge of how much influence public sector labor unions wield in Hawaii: It’s a formidable amount that, on members’ behalf, will be used readily as needed to embroil the state Legislature, the governor, the courts and even their retirees’ investment fund.
Although some labor leaders and experts downplay the political influence of unions here, the privatization drama and unions’ impact on elections reveal their considerable clout, one that dates back to the plantation era. Labor unions are a prevalent force in Hawaii, where about a fifth of workers have union representation, giving the state the second-highest union density in the nation behind New York.
“The one thing I will never buy is that unions are no longer relevant today,” said William Puette, faculty director of the Center for Labor Education &Research (CLEAR) at the University of Hawaii-West Oahu, referring specifically to the unions’ role in collective bargaining to achieve contracts that provide job security.
Politically, the notion that public sector unions here are excessively strong doesn’t necessarily hold weight, Puette said.
“If that were the case the salaries would be remarkably higher,” he said. “I don’t see evidence — as many people politically will try to make hay — that Hawaii’s high unionization has created a situation where the elected officials have to kowtow to the unions.”
But former Gov. Ben Cayetano offers an opposing view, noting that when it comes to the public unions, “we’ve gotten to the point right now where they’re very, very powerful … the HGEA (Hawaii Government Employees Association) is very influential.” Further, public and private sector unions have a strong alliance, and there is power in numbers, he said.
Cayetano, who drew the ire of unions in the mid-1990s when he cut several hundred positions and laid off more than 100 state workers during a budget crisis, said the way to offset the power of labor unions is to elect “public-minded people in the state Legislature and the governor’s office.” Gov. David Ige, he noted, has done well in balancing the unions’ and state’s needs.
Ige, who is trying to formalize agreements with HGEA and the United Public Workers (UPW) over the Maui hospitals, said he recognizes that unions must advocate for their members, but as governor, he must weigh others’ needs as well.
“I am always looking at arriving at some fair agreement,” Ige said. “One that’s fair to the taxpayer, the general population and fair to the union members.”
The ongoing push and pull between the state and public worker unions does underscore the significant advocacy role that unions play.
In the Maui situation, the UPW sued to delay the public-to-private changeover; the suit was settled a few weeks ago after negotiated terms with the Ige administration included coverage of workers through the end of the public contract next June. The HGEA, meanwhile, flexed its political muscle with legislators to secure a law that offered retirement bonuses or severance payments to its 900-some affected employees — a package estimated at $60 million-plus.
Ige had vetoed the measure, warning it could harm the tax-exempt status of the state’s Employees’ Retirement System, but HGEA garnered the legislative votes for an override. The hospitals’ transfer to Kaiser Permanente, originally scheduled for this past July, is now delayed until next July. The setback is now forcing a cut in hospital beds and services at the Maui facilities.
HGEA Executive Director Randy Perreira said that legislators were correct in passing Senate Bill 2077, which awarded the retirement bonuses or severance payments.
“There wasn’t any political arm-wringing,” said Perreira, who represents 42,300 members statewide and is awaiting a proposal from the Ige administration.
“I think we were effective” in advocating for HGEA members on this issue, Perreira said, noting the lack of no votes — even among Republicans — reflected the belief among legislators that affected workers deserved some sort of compensation.
“Let’s be clear. HGEA was prepared to deal with the transition in July of this year,” Perreira said, adding the Ige administration focused mainly on the lawsuit filed by the UPW and ignored the needs of HGEA. “We have not held anything up. We were prepared to do this a few months ago.”
Further, he said that while it originally opposed the privatization, his union chose not to be obstructionists so that health care on Maui would be relatively unchanged.
“I vigorously object to this notion that we don’t take into account the bigger picture,” Perreira said. “For people to suggest that we act contrary to the public interest, to me, that’s crap.”
Ige has found himself on opposite ends of the spectrum with unions on weighty issues, most recently with the Maui hospitals privatization, but also on the scuttled NextEra purchase of Hawaiian Electric Industries Inc. (HEI). Ige was a staunch opponent of NextEra’s purchase of HEI even as unions eventually backed the deal. The International Brotherhood of Electrical Workers (IBEW) Union Local 1240 first opposed the purchase, but agreed to support it once it secured guarantees for its members.
Damien Kim, IBEW Local Union 1186 business manager and financial secretary, said the Public Utilities Commission’s rejection of NextEra’s takeover bid shows that unions don’t always get their way.
“The way that this went down discourages a lot of other (companies) from coming to Hawaii,” Kim said. “It involves a lot of work for the local people. That’s what unions represent. We want our grandchildren to live, work and play here.”
Kim said he “would laugh” if people think that Hawaii’s unions wield a lot of power. Even with the overwhelming majority of Democrats in the state Legislature, “we still can’t get the minimum wage up … not everything is that easy.”
When it comes to elections, Kim said that union endorsements do not come with expectations of favors in return. In the highly contested mayoral race, IBEW 1186 recently threw its support behind Charles Djou; it previously supported Mayor Kirk Caldwell in his last two elections.
“It’s not like we’re buying something from them. … we want someone to listen to our concerns, at least. We want an open-door policy,” Kim said. Caldwell is backed by other big-name unions, including the HGEA, the International Longshore and Warehouse Union Hawaii Longshore Division and the State of Hawaii Organization of Police Officers, among others.
“Unions aren’t always on the same page,” said Puette, of CLEAR. “We have a bunch of them backing Djou. If they were lockstep in a political dance with Democrats, that could not have happened.”
Ige is well aware that his decisions may not always be popular with unions.
“I have always worked very hard to treat the unions fairly. I do recognize that they have an important role advocating,” he said. But as governor, Ige said, he needs to determine “what’s in the best interest of all the people of Hawaii.”
Perreira said HGEA benefits from the fact that “government employees in particular are strong and consistent voters.” The current administration’s actions over the next two years will determine whether HGEA will throw its weight behind Ige, he said.
Looming large are contract negotiations with public worker unions, whose contracts expire June 30 — just as the state finds itself with a record-setting $1 billion surplus. While many surmise that the unions will likely benefit from the windfall, Ige warns that a $1 billion balance is not an overwhelming amount of money.
“A billion (dollars) is about two-and-a-half months of the cost to run state government. In making an analogy, it’s like two and a half months of rent,” Ige said. “It might be significant from a historical perspective, but it’s not a lot of money in reserve.”
As for Perreira, he said that the average wage for an HGEA member about a year ago was $45,000. “We do not represent a highly paid workforce,” he said. “We are representing middle class workers. … if we controlled things, salaries would be much higher.”
