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8 Ways to Fire Up Hawaii's Economy

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The recession has provoked many responses, from the $789 billion stimulus package coming out of Washington to the near-paralysis suffered by many people. At Hawaii Business, the tools we have to re-energize the economy are limited to words, pictures and ideas, but we need to do our part. This is our stimulus package.

Here are eight ideas we have collected for boosting Hawaii’s economy right now and a list of other possibilities. We can’t wait for long-term fixes – though long-term fixes are also important – because our home needs help immediately. And though some of these ideas have serious downsides, they are all worth considering.

We’d like to publish your ideas for stimulating Hawaii’s economy. Please send them to feedback@hawaiibusiness.com.

— The staff at Hawaii Business

1) Buy local

Heaped on the counter of the Kaaawa 7-Eleven, next to cases of manapua and pork hash, there are a couple of hands of Dole bananas for sale. This seems an appropriately local tableau, but the labels show something’s amiss: These bananas are from Ecuador.

A couple of miles down Kamehameha Highway, Richard Davis’ Waiahole fruit stand strains under the weight of several bunches of locally grown apple-bananas. Davis’ bananas are more expensive than the run-of-the-mill South American Cavendish (even at convenience-store prices). But they’re sweet, fresh and likely grown nearby.

 

Surely, the easiest way to help the local economy right now is to buy local products from local people, who can use every dollar in times like these. Add to that something economists call the multiplier effect. A dollar spent on a local banana remains here to be spent over and over again, magnifying its impact on the local economy. Although some of a dollar spent on an imported banana goes to local wages; most goes to the Mainland or a foreign country.

But as it turns out, the economic benefits of buying local aren’t as straightforward as they seem. Because so much of what we buy comes from the Mainland or abroad, dozens of local companies and thousands of local jobs depend on us buying bananas from Ecuador or T-shirts from Thailand. Consider CS Wholesale Grocers, a Mainland-owned company with a 250-employee distribution center in Kapolei. “We’re actually the second-largest distributor in the country,” says general manager Beau Oshiro. “But everybody working in our facility is local, of course.” He points out that if lots of people decided to only buy local, many of those jobs might be on the block. “Guess what, guys,” he says, “we might have to lay off half our work force because we just lost half our volume.” Those are local jobs, too.

Economists also view the buy-local sentiment with skepticism. Sumner La Croix, a research fellow at the University of Hawaii Economic Research Organization, sketches out the theoretical argument against it: “If you’re buying local (and therefore paying more) your income would actually go down.” In other words, the 30 percent premium you pay for local goods is just as much lost to the local economy as if we had sent it to the Mainland. So much for the multiplier effect.

Still, even economists acknowledge that buying local might work in the short term. Besides, there are other reasons to buy local: encouraging long-term sustainability, protecting key cultural institutions and maintaining the green spaces created by agriculture, among others. Even La Croix confesses to a little local chauvinism. “This Saturday, I’ll be over at the Kapiolani Farmers Market,” he says. “And one of the reasons I go there is to support Hawaii’s farmers.” –DH

 

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