Small Business Hawaii | Volume 23 Number 3 | March 1998
Small Business | Measuring H3 | Purpose of the Economy
Environmental Investment Means More Jobs For Hawaii
Small Business Hawaii | Volume 23 Number 3 | March 1998
by Helen Rapoza, Helen's Haven Did you know this is a major election year? Up for reelection this year is: 1 U.S. Senate seat (Sen. Daniel Inouye), 2 U.S. House of Representative seats (Rep. Neil Abercrombie & Rep. Patsy Mink), the Governor (Benjamin Cayetano), Lieutenant Governor (Mazie Hirono), 13 of the 25 State Senate seats, all 51 seats in the State House of Representatives, 5 of 13 seats on the Board of Education, 5 of 9 seats on Office of Hawaiian Affairs Board of Trustees, and all 9 seats on the Council for the City and County of Honolulu. Did you know what the voter turnout was in the last election? According to statistics from the Office of Elections that last election in 1996 had the lowest turnout in the primary and general elections in the state's history. Statewide in 1996, 531,892 people registered to vote in the primary elections. Only 275,548 people actually voted. That's 51.8%, down form 66.1% in 1994. In the general election in 1996 544,916 people registered and 370,230 voted. That's 67.9%, down from 77.15% in 1994. Who is qualified to register to vote? To register to vote you must be a U.S. citizen and be a resident of the State of Hawaii. For voter registration and election purposes, a resident must maintain a residence address in the State of Hawaii and intend to make Hawaii their permanent residence. The registered voter must be 18 years of age. If you are a registered voter but did not vote in the past election you must register again. How can you make a difference? The SBH Young Entrepreneur (YES) group will be handing out voter registration forms and encouraging people to vote. In order to make this voter registration drive a success YES needs volunteers. Volunteers will work in pairs at various locations throughout the island, including shopping centers and community events. It's simple! As a volunteer, all you'll need to do is ask passerby's if they are registered to vote and hand them a form. YES will provide written information to encourage voting including signs, buttons, etc. This is completely non-partisan. Members of YES and volunteers will be encouraging residents to vote, not suggesting how they should vote. Ready to get started? Ready to join the fun and make a difference? Please fax me at 739-0401 and include what area of the island is easiest for you to help. You can also call me at 739-0400.
HOME DEPOT AND THE "FREE MARKET"
by David Lundquitst, Free market, right? Not so! For years government in Hawaii has tilted the playing field in favor of big business through zoning, taxation, and other favors. Although small business is the backbone of Hawaii's economy, we have been dismissed, ignored and abused by local government because we have not banded together as a political force to be reckoned with. We need to respond with action when the call goes out whether it is one of us, a group of us, or all of us that are threatened. That is why the bigs left small business out of the economic task force. But the solutions offered by big business and big government are as nothing compared to the potential unleashed horsepower of the 66,000 small businesses in the state of Hawaii if we force a level playing field and respect from our government. The tide is turning. The preferential treatment of Home Depot by the current city administration is the latest example of small business. Frustration over this has reached critical mass, igniting a firestorm directed at the center of power at City Hall. No longer willing to sit idly by while the daily papers report of business closings each week, hundreds of small businesses who are threatened by Home Depot are drawing a line in the sand at Manana Pearl City Junction. Two or three Home Depots and a (strongly rumored) second Eagle Hardware are planned on Oahu. Each of these five big boxes will displace from locally owned business at least $41 million in sales for a total of $205 million, with a 25% annual sales growth required at each location by corporate headquarters. Expect Home Depot's auxiliary subsidiaries, Maintenance Warehouse and Home Expo as well. Home Depot will also likely be a licensed contractor competing against local contractors. Let's get a few things straight about the impact of this category killer, which utilizes a calculated strategy of putting its competition out of business: Home Depot is the end of competition, not the beginning. The pie will decrease, not increase. There will be a huge net job loss. A large number of our locally owned small businesses will close. Many more will be diminished. The secondary fallout will be huge as the damage done by Home Depot will dwarf that done in other industries to date by category killers. Small businesses' potent multiplier effect of recycled profits and use of local service industries from advertising to wholesaling, CPA's, insurance, fixtures, and equipment leasing (to name a few) will disappear as the category killers (who use national services) whisk their profits quickly out of our island economy. What happens to our children's future after thousands of small businesses are killed off and only a few multi-national companies remain? The opportunity for the lower and middle classes to form small businesses is central to the success and culture of the American Free Enterprise System. The killing off of existing small business and barriers to small business formation by the overwhelming force of big business aided and abetted by government. Your help is needed now! Write you Councilmember today. Submit written and oral testimony. Contact me at 262-6700 or fax 261-4041 for detailed factual information.
By Reg Baker, CPA Reg Baker & Co. Small business is BIG business. The backbone of the Hawaiian economy is small business. The customers maybe tourists or military or whoever but those businesses that take care of those customers are small businesses. Without small business the banks would not have nearly as many customers as they have now. Without small business the government would not have the revenues they have now. Without small businesses most employees would not have the jobs they have now. Without small businesses and the dedicated, hard working and sometimes pathological commitment the owners have the economy and the state would be much worse than it is now. Most people would be surprised at the commitment small business owners have, not only to their own business but to other small businesses throughout the community. Small business owners are generally very willing to assist other businesses when they need it. Small business owners are also very active in the community by serving in volunteer positions, political positions and just generally helping out when necessary. Small business owners need to be applauded and recognized for these efforts and assisted in every way possible in order to survive, continue and flourish. Hopefully this legislative session will take steps to ensure that small business owners and all the beneficiaries of small businesses (the citizens of Hawaii) are supported. The legislature must know that action must be taken now because it is getting to the point of being too late. CPA's (and everyone else) across the state need to encourage their elected legislators to get in gear and make things happen to support small business in Hawaii.
By Ken Schoolland, Schoollland International Partnership Suppose that the most expensive restaurant in town offered free lunches daily to anyone who came. It would be no surprise to find the restaurant packed with customers at lunchtime -- whether they are hungry or not. But it is not logical to conclude that the large crowd proves that the restaurant is a success. Someone will go broke providing the free lunch. This is precisely the logic that some people use to claim that the new H-3 Interstate is a success. "Look at all the traffic," they say. "That's proof that this 16 mile highway was worth $1.3 BILLION." Let's look at this optimistically. Assuming that the novelty of the first week never wears off, preliminary usage figures suggest that the $1.3 BILLION principle cost could be paid off in ten years by charging about $13 per car each way. Charge that much at a toll gate on each end of the highway and my guess is that the traffic would drop considerably--maybe to zero. That's right, people only ride the freeway because it's "free"--mostly paid for by taxpayers on the mainland who will never use this Interstate. "Ah, but we deserve this highway! After all, haven't we been paying for similar projects on the mainland that we may never use!" That's the idea -- keep everyone paying for things that they'd never be willing to pay for themselves and everything will be used as if it was free. This is a formula for steak and lobster--a la bankruptcy! One "free" meal for the price of ten, whether you can afford it or not. An alternative is called "road pricing" and has worked to reduce rush hour traffic in various cities around the world. A driver buys a sticker for the car window that permits him to use the road at rush hour. It reduces traffic at rush hour just like telephone companies do with peak time phone rates. And road pricing pays off existing roads rather than building new ones.
By Tracy Ryan, Freedom Advertising The purpose of an economy is to produce wealth not to produce work. Everyone tries to gain maximum results with minimum effort. This natural drive towards productivity is why the plow replaced the digging stick, the tractor replaced the horse, etc. Yet we are continually being asked to support ideas to promote increases in employment rather than increases in productivity. Job creation, per se, is never a problem that needs to be solved. As long as any human desire goes unfilled there is work that can be done. What is in short supply is the capital necessary to make work productive. Some of the poorest countries of the world have full employment. What they lack is capital to make that employment productive and increase the standard of living of their workers. When someone argues that we should give favorable treatment to one industry over another because the favored one creates more jobs they argue incorrectly. The standard of living of the whole community is best served by those employers who make most efficient use of the limited factors of production, including labor. This efficiency leaves more factors available for the production of other things. The total amount we are able to consume is increased by the efficient use of labor. The purchasing power of workers is increased as the efficiencies inherent in improved tools and equipment improve their output. The government plays a negative role when it creates "make work" programs as was widely in this country during the depression. Workers income doesn't come directly from the work they do, but from the value of that work to others. Government created work ties up labor in projects that have not been selected by consumers. The ability of the economy to most closely match the production of goods and services to the desires of consumers is disrupted. The public works project being pushed on us by our State and County governments as a way to stimulate our economy are ill considered on that issue. Public works reduce the role of the role of the private economy. They do not, on net, create jobs. They can only be defended based on the intrinsic public benefit of the completed project. Chronic unemployment is the result of people holding out for a higher rate of pay than the current condition of the market warrants. The solution is for such persons to bite the bullet and take what work they can. Most of us have had to face this unpleasant fact at some time in our lives. It is a necessary part of the market's constant adaptation to suit our needs as consumers. Attempts to interfere with this element of market economics reduce both employment and productivity. The market left alone will provide the best overall standard of living.
ENVIRONMENTAL INVESTMENT By State Rep. Terry Nui Yoshinaga
In tough times, some think that protecting our environment is a luxury. It is not. And if done right, environmental protection does The legislative initiative of the House Energy and Environmental Protection Committee reorganizes the state's environmental protection efforts by 1) transferring permitting functions for a number of environmental programs into another department while keeping enforcement functions in the present department, 2) streamlining the permitting process, and 3) establishing a public policy criteria that protects, and strikes an appropriate balance between, economic development and environmental protection. This new legislative initiative:
* Better organizes and uses existing government resources; * Streamlines the permitting process to get applicants started in business sooner; * Achieves a better check and balance between the permitting and enforcement functions, and * Casts government in the more effective role of promoting private sector environmental businesses so that new jobs can be created. The key to achieving this is a Public Policy Criteria under which actions to protect the environment fall along a continuum that helps to decide if an environmentally protective action is effective or whether some other action would be better. First, not all environmentally protective actions undercut economic development, nor do all economic development actions undercut environmental protection. Second, environmentally protective actions can be reasonably characterized as a continuum ranging from Pollution Removal (Stage 1), Pollution Prevention (Stage2), Designing The Ejected Material For The Environment (Stage 3), to Design For Sustainability (Stage 4). The further the continuum one goes, the greater the benefit that is achieved simultaneously for the environment and economic development. In "Design for Sustainability" (Stage 4) activity, ejected material is kept from release into the environment because it constitutes a raw material for some other profitable economic activity. Conceptually, it is like the exchange of oxygen and carbon dioxide between plants and animals. The waste that plants give off (oxygen) is used by animals, while the waste which animals give off (carbon dioxide) is then used by plants. Third, this Continuum directs government to encourage the private sector to engage in environmental protection as an entrepreneurial enterprise. Because private sector businesses can adapt more quickly to advances in technology and changes in circumstances than can a government bureaucracy, government should limit itself, except in cases of emergency, to regulation, governance and infrastructure promotion in the environmental sphere. And fourth, this Continuum directs government to promote two very important private sector enterprises: 1) the development of a market for recycled products, and 2) the development of an export market for environmental protection businesses. Other states have created state agencies with the specific responsibility of developing a market for recycled goods, the absence of which is "[one] of the weakest links in the recycling chain." The State of Hawaii should do the same and not let this tremendous long-term economic development opportunity slip through its fingers. If done right, this legislative initiatives systematic design is like putting in irrigation ditches in a field. When the rain does finally come, our field will be irrigated and we can raise a crop. This initiative will empower the State of Hawaii to achieve both a healthier environment and a stronger economy, now and in the 21st Century.
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not have to hamper our economy. In fact, many other state legislatures have discovered that economic development and environmental protection actually promote each other.