Second Opinion by Cliff Slater
July 14, 2003
Give workers a virtual raise
The news came out last week that Hawai’i’s teacher salaries were the lowest in the nation[i] — when adjusted for cost of living.[ii] However, that would hold true for virtually any job in Hawai’i — government or private.
According to the Tax Foundation of Hawai’i, government job pay here is about level with the Mainland[iii] — before any adjustments — while private jobs pay less than the Mainland.[iv] Low pay here in Hawai’i is, as they say, “The Price of Paradise.”
However, since there is no extra money for raises without increasing taxes, how about giving everyone a virtual raise?
We can do that by lowering Hawai’i’s high cost of living, which, according to the generally accepted ACCRA data, is about 40% higher than the U.S. average.[v]
To begin, let’s take these three examples:
· Do our groceries prices have to be so high?[vi]
· Do our car insurance rates have to be among the highest in the Nation?[vii]
· Do our utility costs have to be the highest in the Nation?[viii]
The Jones Act requires that groceries carried from the Mainland to Hawai’i be on U.S. built ships with U.S. crews. We are the only state in the Union that is totally dependent on such ships for surface freight. Other states have the option of using trucking. Were Hawai’i to have an exemption from the Jones Act, freight costs would be half of what they are today.
The irony is that most of the ships’ crews live on the Mainland and so they benefit from both lower prices and high wages — at our expense.
Now you would think that our Congressional delegation, which is famed for “bringing home the bacon,” could arrange for an exemption. You know the answer; follow the money. The pro-Jones Act lobby funds our delegation very well.[ix]
Let’s move to car insurance. We hear estimates of Hawai’i’s uninsured motorists in the range of 25-30 percent. Whatever the number, these are freeloaders who drive up the cost of living for all of us. The answer to this problem is quite simply to require the insurance companies to provide the state with the license plate numbers of all insured vehicles monthly. In addition, require the City to provide the state with a current database of all registered vehicles. Then match the databases and send the owners of uninsured, but registered, vehicles a letter requiring them to either get insurance or turn in their license plates within 7 days. How hard can that be?
The problem is that uninsured motorists vote — and insured motorists do not seem to care about the extra cost. Why should your elected officials risk offending these voters?
Let’s look at our high utility costs—double that of the other states. Let me say that again — double. Now I am sure that Hawai’ian Electric can rationalize their way out of this huge difference. Monopolies, public or private, are usually good at that. Maybe the Jones Act adds to the cost of incoming equipment and fuel oil, maybe fuel oil is more expensive than coal and maybe our generating plants are smaller than Mainland ones.
Nevertheless, does anybody believe that the way to get the best prices for a product is to give the provider a monopoly? When the phone company had a monopoly on phone service they could justify that — but competition transformed that market.
These are just three opportunities for legislators to give Hawai’i’s people a virtual raise: it could be a start.
Cliff Slater is a regular columnist whose footnoted columns are at: www.lava.net/cslater
[i] Teacher salaries http://www.aft.org/research/survey02/Table_III-1.pdf
[iii] 1998 Government in Hawai’i. Tax Foundation of Hawai’i. Table 41: Average Monthly Earnings of Public Employees.
[vii] 2001 study by the National Association of Insurance Commissioners of 1999 premiums. http://www.1-auto-insurance-quotes.net/tips-on-saving-money/costofauto.html