January/February 2009 VOICE ILWUOF

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Volume 49 • No. 1 January/February 2009

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The VOICE of the ILWU—Published by Local 142, International Longshore & Warehouse Union

Credit crisis cuts into global shipping

At the Port of Los Angeles, 7.3million containers moved across thedocks from January through Novem-ber, down more than 5 percent. Thedrop was bigger in Long Beach, with 6million containers moving through theport, down about 10 percent.

On both coasts of the U.S. and inthe Gulf, ports that were expectingcontinued growth in ships packedwith Asian imports are instead seeingsharp declines in imports and exports.

The once booming container trafficfrom Asia has slowed dramatically asthe bad news in the financial marketscause US and European consumers to

cut back on their spending. With lessdemand for finished products, exportsof raw materials have also fallen.

A shortage of credit has also takena toll on global shipping. As much as90 percent of international traderelies on letters of credit, tradeinsurance, and other forms of com-mercial IOUs that transfer paymentsto suppliers and shippers once thegoods are delivered.

World credit is in short supply asinternational banks are hoardingtheir cash to cover losses from thebillions of dollars of mortgage-backedsecurities they bought from the US.To make more credit available, manyEuropean and Asian governments areinjecting cash into their financialsystems by buying preferred stocks intheir banks.

With cargo bookings down, shippingcompanies are cutting rates, reducingtheir capacity, and laying up ships.APL and its partners plan to take 60ships out of service. To make mattersworse, a record number of newlyconstructed ships with a total capacityof 1.6 million TEUs are scheduled tobe delivered in 2009.

The over capacity will start farewars, loss of revenues, and will likelyforce weaker shipping lines to mergeor go out of business.

Solidarity and action by ILWUmembers in Hawaii helped

score a Christmas-time victory for agroup of exploited merchant mari-ners late last year. The crew of 20from the small tanker, Japan Tuna#3, arrived at the islands after alengthy voyage deep into the tropicalPacific where their ship provides fueland supplies for a commercial tunafishing fleet that remains at sea formonths at a time. Years of low payand discrimination finally movedcrewmembers to sign a petition thatwas delivered to U.S. Coast Guardofficials when the ship docked inHawaii. A Coast Guard Lt. Com-mander contacted ILWU-memberJeff Engels who coordinates work onthe West Coast for the InternationalTransport Workers Federation(ITF)—a global network of unionsthat includes the ILWU.

Last March, Engels conducted atraining in Hawaii for volunteersfrom Local 142 longshore and theIBU who wanted to learn how torespond to incidents like the one thatwas now unfolding in Honolulu.

Engles also met with Coast Guardofficials in Hawaii, and it complainedabout conditions aboard the JapanTuna. ILWU International PresidentBob McEllrath and Vice Presidentfor Hawaii, Wesley Furtado, werecontacted by Engels to review theaction plan. Engels then called Local142 Business Agent Tyrone Taharaand IBU Regional Director WarrenDitch, who, along with Local 142longshoremen Brad Scott, DennisMorton, and Sean Dacuycuy, had allattended last year’s training session.

The Hawaii team quickly decidedthey should visit with the JapanTuna crew to gather evidence andprovide moral support. After Engelscalled the Japan Tuna’s manage-ment company in Singapore toexplain that the crew wanted a unioncontract, he boarded the next flightto Hawaii.

The Japan Tuna’s crewmemberscame from the Philippines, Korea,and China, but they had no problemmaking their demands clear forbetter pay, an end to discrimination,and insistence on a contract. Word

about the crew’s desire for a unioncontract spread quickly on thewaterfront by word-of-mouth andthrough the Ports Council that helpscoordinate efforts between Hawaii’swaterfront unions. The company feltpressure from inquiries that were

How the economic crisis affects usMost economic forecasts, including

that of the Federal Reserve Bank,predict the U.S. economy will remainin recession throughout 2009 and maybegin a slight recovery around themiddle of 2010 with modest growth in2011.

The U.S. economy goes into reces-sion about once every 10 years andusually recovers in one or two years.Past recessions have also been milderfor Hawaii than other states, becausemilitary spending continues andJapanese visitors make up for declines

in mainland visitors.This recession, however, is world-

wide and will lead to declines in bothJapanese and mainland visitors. Thisrecession also threatens to be moreserious and last longer than any otherrecession since the so-called GreatDepression which lasted ten yearsfrom 1929 to 1939.

The slowdown in economic activityand tourism means smaller paychecksfor Hawaii workers and less taxrevenues collected by the State andCounties. It also means the union’s

income has fallen because membersare paying less union dues.

This means the State, Counties, andthe union must be prepared to cutexpenses and operate with less incomefor two or more years. While the statemay raise some fees, the ILWU’sofficers will not be asking for a duesincrease.

The ILWU officers have beencutting expenses for several years,and the union’s spending is actuallyless than it spent in 2003. The one

Continued on page 6

The next Local 142 Executive Board meeting is set for March 20, 2009, in Honolulu at the ILWU building on 451 Atkinson Dr.

—Continued on page 8

ILWU scores victory for mistreated mariners Pho

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The VOICE of the ILWU (ISSN 0505-8791) is publishedevery two months for $2 per year by Hawaii InternationalLongshore & Warehouse Union, 451 Atkinson Drive,Honolulu, Hawaii 96814. Periodicals postage paid at thepost office of Honolulu, Hawaii.

POSTMASTER: Send address changes to VOICE of theILWU, c/o ILWU Local 142, 451 Atkinson Drive, Honolulu,HI 96814. Editorial Board: Fred Galdones, Donna Domingoand Guy K. Fujimura.

Editor: Mel Chang

2009 ILWU legislative priorities set

I n t e r n a t i o n a l P r e s i d e n t ’ s M e s s a g e

CORRECTIONS

November/December 2008

Voice of the ILWU

Our apologies to Department ofEducation Superintendent PatriciaHamamoto who was incorrectlyidentified as Patricia Hashimoto.

By Robert McEllrathInternational President

Like most of us, the New Yearhas me thinking about the

challenges that we’ll be facing aheadin 2009, and reflecting back on theILWU’s accomplishments during thepast year.

Everybody’s worried about theeconomy as we enter 2009, and forgood reason. Things are bad andgetting worse. As I write this in mid-December, more than one millionworkers have lost their jobs in thepast three months. With so manypeople out of work, most of us knowsomeone who’s recently lost a job orcan’t find one. In the ILWU, we’rehearing about plants andwarehouses that are closing. Theports have fewer ships and less workthan a few months ago. Everydaythere’s more news about cutbacks,closures, and consolidations. Mostworking families are either hurtingor scared about the future.

When somebody loses a job, it hitsa family hard, but the damage goesmuch deeper. With fewer peopleworking, less revenue in companycoffers, and the stock market atrecord lows, our health andretirement funds are under pressure.Everyone with a 401(k) knows what

“shape-up” system to pick who theywanted for each shift, often with pay-offs and favors.

But a man named Harry Bridgeswon support from his co-workerswith a simple, but remarkablypowerful idea: organize the men,form a union, and demand a dispatchhall that would allocate the jobsfairly and equally. Think about it.The hall is a place to go when yourjob is completed. Most people reportto their state unemployment officewhen they’re laid-off and no longerneeded by their employer. Beingreleased to the dispatch hall is not apenalty, but a hard-fought privilege.This year on July 5th, we’ll celebrate75 years of ILWU history. We honorthe men who fought and died for theright to dispatch themselves fairlyand equally, regardless of who youwere, who you knew, the color ofyour skin, or the country you camefrom. The system allowed every mana day’s work. These principlesbecame the foundation of our ILWUunion.

Today these principles are moreimportant than ever. Our economy isin a tailspin, and we all must take along hard look at what’s happeningin our own house. For example, is itfair for an individual to have twojobs in one day, when others cannotget even one? It’s easy to make apolitical issue out of the situation, tosit back and endlessly argue theproblem. However, the workopportunities are likely to get worsebefore they get better. We all like tosay that we’re “good union people” ingood times. Well, these are the timeswhen we will be tested. This

it’s like to see half your nest eggdisappear. And while the definedbenefit pensions that many of ushave are a lot better than a 401(k),nobody’s pension and welfare plan isimmune from a volatile stockmarket.

The economic damage caused byGeorge W. Bush and his free-marketfollowers – in both political parties –has been staggering. The war in Iraqalone will cost us three trilliondollars. And when you include all thelosses from unemployment, homeforeclosures, personal and businessbankruptcies, and a falling stockmarket, the total is mind-boggling.

With all this doom and gloom,most of us cannot wait for PresidentObama and his family to move intothe White House, so we can startputting people back to work,providing health care to allAmericans, getting out of Iraq, andpassing the Employee Free ChoiceAct (EFCA). It’s a very tougheconomic time to accomplish allthese goals, and President Obamawill need our support.

I wonder if there isn’t more wecould do to ease the pain of thisrecession in our ILWU family,especially among workers who havedispatch halls.

I think part of the answer comesfrom studying the situation HarryBridges faced in 1934. The stockmarket had crashed in 1929 and theUnited States was trying to recoverfrom a depression. Theunemployment rate was 25 percentand workers were literally fightingeach other over jobs. On thewaterfront, employers used the

recession may be the deepest ourpresent union members have everexperienced. It’s time to ask yourself,“Is it fair for me to have two jobs inone day when others don’t get evenone?” Our union must be prepared tore-affirm the principles establishedby Harry Bridges. I urge each localand individual to adhere to the spiritof fairness that founded our union,put personal gain aside, and takecare of each other. “An injury to oneis an injury to all.”

Thoughts about the New Year

1. Employee Right to JoinUnions. Provides for card checkunion recognition under the HawaiiLabor Relations Act and for medi-ated and arbitrated first contracts.This change would provide analternative to the secret ballotelections under current law, whichallows some employers to abuse theprocess and prevent a fair election.

2. Employee Retention. Pro-vides for workers to retain their jobswhen companies are purchased,when ownership or managementchanges, when a lease is transferred,or when assets are sold and/ortransferred and the business opera-tions continue in a similar mode asunder the previous owner or man-agement. The US lags far behindmost Western European countries,which have strong laws that protectworker’s rights and jobs.

3. Protect Workers Compensa-tion. Maintain the existing

support for harbor developmentthroughout the State of Hawaii.Waterfront development mustprioritize the need to provide forgrowing manifested cargo operationsand not compromise the safe workingconditions for the employees.

5. Senior Programs. Strongsupport for programs that benefitsenior citizens.

Hawaii Division is also stronglysupporting priority funding of

ILWU union political action will focus on passing legislation infive areas during the 2009 Legislative Session. The top prioritywill be the passage of an Employee Free Choice Act for unionrecognition. This came close to passing in 2008 but failed toget enough support to override Governor Lingle’s veto.

“presumption clause” in the Workers’Compensation law. Provide thatinjured workers continue to receiveworkers’ compensation benefits(wages and medical treatment)during any period that their claim isbeing investigated or under appeal.Provide for timely payments when aclaim is made. Provide that if aninjured worker is denied compens-ability and then wins compensabilityon appeal, the cost of the appeal willbe paid by the insurance carrier.Address problem of physiciansdeclining to treat Workers’ Compen-sation cases because of thepaperwork and/or the medical feeschedule. Establish panels of medicalproviders from which the claimantand insurer shall mutually elect aphysician to perform an IndependentMedical Examination (IME). Arating shall not be performed at thesame time as the IME.

4. Harbor Development. Strong

buildings already under constructionfor the Hawaii Community College inWest Hawaii (Kona).

All legislators are given a copy ofthe entire ILWU Legislature Pro-gram for 2009 which contains 97points that cover a wide range ofissues such as education, health andsocial programs, economic develop-ment, protecting the environment,civil rights, culture and the arts.

ILWU members and retirees from each island work in teams to visit theirrepresentatives on the opening day of Hawaii’s State Legislature on January21, 2009. Their presence reminds lawmakers that the union has a strong andactive political action program and will be watching what the Legislaturedoes. Maui Division’s Ruby Yoshisato, Perlita Manlansing and LourdesRivera with Senator Roslyn Baker (second from right).

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Understanding what caused the economic crisis

Most unionized workers havepension plans that are insured andguaranteed by the federal govern-ment, through the Pension BenefitGuaranty Corporation (PBGC).

All defined benefit pension plansmust pay for this insurance and mustfollow very strict rules and regula-tions set by the government. One rulerequires pension plans to have enoughcash and assets to cover 60 percent ofthe benefits earned by workerscovered by the plan.

While the federal government hasvery strict regulations for pensionfunds, there were no rules or regula-tions on the mortgage-backedsecurities sold by banks and invest-ment brokers which caused thisworldwide economic crisis. In fact,Republican-backed legislation in 2001actually forbid any governmentregulation of these securities.

The banks sold these securities andwere not required to have the cash toback these securities. The ILWU staffpension plan has to guarantee 60percent of our pension benefits.Lehman Brothers had enough cash tocover maybe 3 percent of their finan-cial commitments and that’s why theyhad to seek bankruptcy protection.This is why governments around theworld are forced to spend billions ofdollars to bail out their banks.

Worldwide credit shortage

By the end of 2006, US investmentbanks had sold over $2 trillion ofmortgage backed securities andCollateralized Debt Obligations orCDOs, which were bought by US andforeign banks, pension funds, invest-ment funds, and individuals. TheseCDOs were supposed to be low risk,high quality investments whichreturned a very high rate of 10 andeven 20 percent a year, which was twoto four times more than normalinvestments.

In reality, CDOs contained mostlyhigh risk assets such as sub-primemortgages and were not worth whatwas paid for them, and were likely tolose value over time. Investors andbanks around the world had paid fartoo much for CDOs which may only beworth half their face value or less.

In 2005, thousands of adjustablerate mortgages kicked up monthlypayments and sub-prime borrowersdefaulted on their loans. Over 200 USmortgage companies declared bank-

ruptcy, unable to repay their loansfrom bigger banks. The big banksthemselves had raised money byselling CDOs and faced potentiallosses of billions of dollars and didn’thave enough cash to cover theselosses. In 2007, Lehman Brothers wasforced into bankruptcy when banksrefused to loan them money to pay offtheir debts. Bear Stearns and Frenchinvestment bank, BNP Paribas, frozeseveral of their funds which containedCDOs.

Worldwide credit shortage

Banks began hoarding cash to coverpotential losses and stopped lendingmoney to each other, fearing theywould not be repaid. This caused ashortage of credit that affected allareas of the economy and pushed theeconomy further into recession.

Businesses rely on short term loansand credit from banks for their normalday-to-day operations. Banks cut backon short-term credit and stoppedmaking loans for construction projectsand to consumers who wanted to buycars and houses. This forced busi-nesses to sell stock or layoff workers toraise cash for their operations. Thelarge sell-off of stocks pushed stockprices down, leading to huge losses inthe stock market.

Consumers stop buying

While the biggest losers were theinvestors and banks on Wall Street,the constant bad news eroded USconsumer confidence. Consumers cutback on their Christmas spending andpurchase of higher cost items such asautomobiles and household appli-ances. Unusually bad weather alsokept consumers at home and awayfrom the shopping malls on importantshopping days such as the day after

Thanksgiving and the day afterChristmas. The combination ofdevalued CDOs, stock market losses,and weak consumer spending playedoff each other causing a downwardspiral of the US economy. As the USeconomy sank it began to drag theworld economy down.

Sub-prime mortgages

Sound banking/lending practices inthe past required homebuyers to passstrict standards to qualify for a loanor mortgage. Buyers had to put adown payment of 10 to 20 percent.They had to earn enough income topay the monthly payments, alongwith any other loans and expensessuch as car payments. They had tohave a good credit history of payingtheir bills on time, and low or nobalances on their credit cards. Theyhad to have an assessment of thevalue of the house they were buying,and they had to carry insurance onthe house. All of this guaranteed thebank would profit from making thisloan. These were prime mortgages,good as cash in the bank, and wereoften sold and resold to other banksand investment companies at a profit.

In the 1990s, many of the lawsregulating banks, securities, mort-gages, and investments were changedto reduce government regulationswhich would supposedly be good forbusiness and the economy. To furtherstimulate the economy after a mildrecession, the Federal Reserve cutinterest rates from 6.5 percent in2000 to 1.75 percent in December2001.

With plenty of money available atlow interest rates, banks and mort-gage companies began making homeloans to millions of people who couldnever afford to qualify for a conven-

tional mortgage. There were variousgimmicks used to make the loans seemaffordable, such as no down-payments,interest-only loans, and adjustable-rate mortgages. The monthlypayments would be affordable for afew years, then the monthly paymentsor interest rates would increase. Thesewere called sub-prime mortgages.

The tremendous increase in housingsales led to huge jumps in home pricesin states such as Nevada, California,and Florida. There were many storiesof people buying property and sellingthem a few months later for hugeprofits. New housing developmentswould be sold out before homes wereeven built.

Investment banks and sub-primeborrowers were not thinking about therisk. They assumed the value of thehouses would increase forever, andthey could always sell the property fora big profit. To raise even more moneyand make more loans, banks packagedthese sub-prime mortgages togetherwith prime mortgages and sold themas mortgage-backed securities calledCollateralized Debt Obligations(CDOs).

These CDOs were sold to investors,hedge funds and banks all over theworld. Some of these mortgages wereguaranteed by Fannie Mae andFreddie Mac and appeared to be safeinvestments. Fannie Mae is theFederal National Mortgage Associa-tion and Freddie Mac is the FederalHome Mortgage Corporation. Theseare privately owned mortgage compa-nies, backed by the financial resourcesof the US government.

Around 2005, thousands of adjust-able rate mortgages reset at higherrates and sub-prime borrowers werefaced with huge increases in their

—continued on page 6

T h e E c o n o m y

Government regulation andoversight of the bankingand investment industrycould have prevented theeconomic crisis. Instead,Bush and the Republicansdismantled any effectiveregulation of the financialindustry. They continue tobelieve less governmentand less regulation is good.

Major Events Affecting Hawaii Visitor Arrivals(Graph line = monthly Hawaii visitor arrivals by 1000s)

1st Gulf War

and 1990-93

recession

Dot com

bubble and

collapse9/11 and US

Invasion of Iraq

SARS

July 2007

beginning of

credit crunch.

Dec 2007

official start of

recession.

Major Events in Financial Crisis(Graph line = monthly Hawaii visitor arrivals by 1000s)

Sep-Oct 2008

global stock

markets plummet

Aug 2007

Funds

backed by

subprime

mortgages

lose value

July 2007

beginning of

credit shortageMar 2008

Bear Stearns gets

emergency loan from feds

Mar 2007

Subprime

mortgage

holders

begin to

default on

their loans

Apr 2007

Subprime

lenders go

bankrupt

Dec 2007

US

officially in

recession

Jan 2008

Goldman

Sachs, Bear

Stearns,

Lehman

Brothers

project huge

losses

Sep 2008

Lehman Brothers

goes bankrupt

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A h Q u o n M c E l r a t h , I L W U S o c i a l W o r k e r

Monthly Division Board Meetings: Hawaii - Last Friday; Maui - 3rd Wednesday; Kauai - 2nd Wednesday; Oahu - 4th Friday.

Ah Quon Leong was born onDecember 15, 1915. Sheovercame the hardship and

difficulty of growing up the secondyoungest of a poor, immigrant familyin Hawaii. Her father died when shewas five, leaving her mother to raisethe family. Her older brother stoppedgoing to school to help support thefamily. All the children would helpby collecting kiawe beans, driedbones and scrap metal to supple-ment the family income. They evenmade and sold charcoal to helpsupport the family.

Despite the financial hardship, AhQuon was able to acquire an ad-vanced education—graduating fromthe University of Hawaii in 1938with a degree in sociology andanthropology and later attendingthe University of Michigan in socialwork. But, instead of using hereducation for her own financial gain,

she dedicated her energy, skills andknowledge to help others.

She worked first as a volunteerand then as a full-time social workerwith the Hawaii Territorial Board ofPublic Welfare from 1938 to 1946,where she organized an industrialassociation that won raises forprofessional and clerical workers.She did volunteer work for Hawaii’sstruggling labor movement, usingher social work training to helpworkers and their families duringthe 1938 Inlandboatmen’s Unionstrike and victims of the 1946tsunami which devastated Hilo.

It was during this time that AhQuon met and married Robert (Bob)McElrath, who was helping JackHall publish the Kauai Herald andorganize sugar and pineapple work-ers. In 1942, Bob got a job as amachinist at the Inter-Island SteamNavigation Company dry-dock in

A Celebration of Ah Qu

Honolulu, where he organized theindependent Marine Engineeringand Dry Dock Workers Union ofHawaii. Bob and his union organizedworkers at Hawaiian Tuna Packers,the American Can Plant, and theHawaiian Pineapple Company (Dolecannery). Ah Quon was activelyinvolved in helping to organizepineapple workers. Many of theorganizing meetings with workerswere held in the living room of theMcElraths’ home on Elm Street inthe old Sheridan Tract.

In 1945, the dry-dock and pine-apple workers voted to affiliate withthe ILWU as Local 150 and Bob wasnamed the information director ofthe ILWU. [Bob McElrath ran theunion’s radio program, negotiated

contracts, and wasappointed as theILWU’s RegionalDirector in 1969when Jack Hall waselected as theInternational ILWUvice-president.McElrath retired in1978 and passedaway in 1995.]

In 1946, Ah Quondid volunteersupport work forILWU members during the 1946sugar strike which involved 26,000workers and tens of thousands oftheir family members. She helpedsurvey and assess members’ needs,helped organize the union soupkitchens to provide thousands ofbalanced and nutritional meals, andhelped members with a wide varietyof medical and social problems. Thesuccessful organization of sugarworkers, based on racial unity, laidthe foundation for Hawaii to evolveinto a modern, democratic society.

Ah Quon continued her work withthe union during the 1947 pineapplelockout and again in 1949 during thelongshore strike.

When amidst anti-communisthysteria of the 1950s the “Hawaii 7”defendants were accused in a SmithAct case of teaching the overthrow ofthe government by force and violence,Ah Quon was office manager for theirdefense. In fact, this was an attemptto break the ILWU, which failed.

In 1954, the ILWU finally startedpaying Ah Quon for her work andhired her to provide social services tounion members, mostly immigrants.She helped them with the medicaland health benefits they received asa collectively bargained benefit. Shealso worked with the union’s growingelderly population of single, Filipinoplantation workers, helping many ofthem return to the Philippines whenthey retired.

Ah Quon believed in training and

“We all gain a measure of immortality in families and friends who remain after us and in being part of thehuman gene pool. But primarily a measure of our immortality is preserved in the building of a union, theILWU, which is nearly 70 years old and which, through good times and bad, through good leaders and bad,through good members and bad, through good policies and bad, continues as an organization throughwhich working people can still exercise a measure control over the nature of their work, that whichcontinues to define who we are and what we are.

“The lessons are many that we can learn from the history of our union. Only you can learn from thoselessons and pass on what you learned to others. Only you, in concert with others, can prevent moving intothe bowels of a police state. You can do it, but only if you are willing to participate in the life of your local,only if you do not become smug in your protected jobs with adequate wages and fringe benefits, only if yourecognize that there are many more of us who slave 40 or more hours a week at two or three jobs to putfood on the table, pay the rent, send our children to school, and get health care only if we do without ameal.

“The 16.1 million of us in unions have a refuge only so long as we are willing to organize the 129unorganized million workers subject to layoffs, bad working conditions, low pay because business andindustry concentrate on their bottom line by exporting capital and jobs abroad...

“That is your mission in the 21st Century. To ignore that mission is to condemn your children and yourgrandchildren and the rest of the working class to lives with debts, no education, no health care, no hopefor the future.

“The cudgel is there for you to pick up. You can do it. Will you do it?”

—Ah Quon McElrath, 32nd Convention of the ILWU, San Francisco, California, April 28 - May 2, 2003

Your mission is to organize

ILWU longshoreman and union organizer Joe “Blurr” Kealalio,actor, singer, and trade union activist Paul Robeson, and AhQuon in 1948.

Testifying before the State Se

(Above) Ah Quon addresses Maui Pine workers in 1961.(Above, right) Conducting a workshop at the Kauai Divisionoffice in Lihue.

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A h Q u o n M c E l r a t h , I L W U S o c i a l W o r k e r

h Quon McElrath

Health & Welfare - HMA Office - 866-377-3977; Akamai Line - 866-331-5913; Catalyst RX - 888-869-4600; Kaiser - 800-966-5955.

“You are the union. All you need do to carry on that noble traditionof your ancestors to become good union members—attend all yourmeetings; ask questions when you are unsure; make suggestionswhen you think things are going wrong; an elected official whodoesn’t represent you and the rank and file; a worker who is notgetting the attention when a grievance is filed; know your contractwell so you can represent a worker on the job and when there istrouble. Belly aching is not enough.

“There’s a lot you can do; in concert with other working people,with all the mothers and fathers and children of this world ininternational solidarity we can live in peace, with enough food toeat, enough water to drink, health care when needed; education forchildren.

“Will you do your part with other workers and families in Hawaii, inthe United States, in the rest of the world? Are you willing to become aleader? Are you willing to carry the torch your ancestors lit for unions,still the only social organization in whose hands workers can manageto control the conditions of work which defines you and all otherworkers who produce the goods and services, the art and music, theliterature and dance which nourish the human spirit and mind infreedom and love and with equality and justice? Will you do it?

—Ah Quon McElrath. 23rd Convention of ILWU Local 142Honolulu, Hawaii, September 15-19, 2003.

You can do it..will you?

developing union members to helpthemselves and their fellow workers.She worked with the ILWU’s mem-bership service committees composedof worker volunteers who wouldcounsel other workers and referthem to the appropriate socialagencies.

Active in retirement

Ah Quon retired from the ILWU in1981, but never retired from her life-long mission of helping workingpeople help themselves, of defendingcivil rights, and of advocating for fairtreatment of the underprivileged.

In 1983, she attended the foundingconvention of the Nuclear-FreePacific Community in Vanuatuwhere the people of many of thePacific island nations came togetherto call for an end to nuclear wastedumping and nuclear bomb testingin the Pacific. Later that year, AhQuon moved to Washington, D.C. towork with the Villers Foundations onnational legislation on issues con-cerning the elderly.

On her return to Hawaii in 1985,she co-founded the Committee onWelfare Concerns which helped focusthe previously separate lobbyingefforts of individuals and organiza-tions concerned with the elderly,welfare rights, the handicapped, civilrights, and social programs.

During many session of the HawaiiState Legislature, Ah Quon would

camp out at the State Capitol andsift through hundreds of proposedbills, looking for proposals thatwould impact the lives of the poorand the elderly, erode civil rights, orincrease the cost of living. Then sheand the Committee on WelfareConcerns, an organization of indi-viduals and 24 organizations whichAh Quon co-founded in 1985, wouldlobby lawmakers on behalf of andwith poor men, women, and children.She sought most of all to establish auniversal health care system that

would cover everyone.In 1998, Ah Quon fought for

legislation that would allow for dyingwith dignity and doctor assisteddeath. She was instrumental in theformation of Governor Cayetano’sBlue Ribbon panel on Living andDying with Dignity. She workedhard to promote greater publicawareness of how current medicalpractices often prolong death, of thedifficult choices faced by families andthe individuals with terminal illness,and of the cost of dying with dignity.

Ah Quon was appointed to theBoard of Regents of the University ofHawaii from 1995 to 2003 where shebrought a unique perspective to thegoverning body of the University ofHawaii system. She was a strongand passionate advocate for studentsand faculty, serving as the chair ofthe Regent’s Academic AffairsCommittee and Committee onStudent Affairs.

Educate ILWU members

Ah Quon continued to educateILWU members—both here inHawaii and on the Mainland—aboutthe union’s progressive history andthe need for union members to workfor peace and justice. She was afeatured speaker at a number ofILWU conventions, pensionersconfererences, at educational LEADInstitutes on the West Coast, andthe Labor Institutes in Hawaii.

Ah Quon received recognition forher lifetime work in advancing thecause of working people, the poor,the elderly and the disadvantaged bynumerous community organizationsand groups, not only in Hawaii butnationally as well. She was recog-nized by the Asian Pacific AmericansLabor Alliance, by Na Loio, theYWCA of Hawaii, the University ofHawaii School of Social Work, theHawaii Institute for Public Affairs,the Hawaii People’s Fund, and manyother organizations.

Ah Quon touched the lives ofthousands of Hawaii’s people. AhQuon passed away with dignity onDec. 11, 2008, just a few days shortof her 93rd birthday. She is survivedby a daughter, Gail, a son, Brett, twograndchilden, one great-granddaughter, brotherAh Nee Leong anda sister Mabel Abili.

Ah Quon honored at a dinner held by The People’s Fundon November 1, 2008. (L-r) ILWU Local President FredGaldones, Kenneth Ige of Unit 4412-Servco Pacific Inc.,Oahu Business Agent Tyrone Tahara, Sean Dacuycuyand Dennis Morton of Unit 4201-Hawaii Stevedores.

ore the State Senate in 1961.

Ah Quon with ILWU International Vice President CurtisMcClain.

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T h e E c o n o m yHawaii law requires service charge disclosure

How the economic crisis affects us—from page 1

exception is contributions to theunion’s staff pension fund, which hasto be increased to make up for lossesin the stock market.

The officers met with the union’selected rank-and-file trustees onJanuary 5, 2009, to explore otherways to reduce expenses. The officersand trustees agree that layoffs or cutsin wages and benefits of personnelwould only be made as a last resort.

One cost cutting measure willreduce two-day meetings to one day.This is why the March 2009 LocalExecutive Board meeting is scheduled

A Hawaii law passed in 2000(HRS §481B-14] requires any

hotel or restaurant that applies aservice charge for the sale of food orbeverage services to distribute theservice charge directly to its employ-ees as tip income or clearly discloseto the purchaser of the services thatthe service charge is being used topay for costs or expenses other thanwages and tips of employees.

The Hawaii law sought to protectconsumers by preventing deceptivepractices and unfair competition. It’scommon for many restaurants toautomatically add a service charge of15-18 percent to a group of 6 or morepeople. Most hotels add a servicecharge to food and beverage func-tions at the hotel. Customers assumethat all or 100 percent of this servicecharge is given to employees as tips.If management keeps some of the

service charge, then they mustinform their customers.

One of the lawsuits is against theKahala Hotel & Resort in Honolulu.It was filed by a man who paid morethan $15,000 for a wedding recep-tion. He paid a 19 percent servicecharge on food and beverage, but thehotel did not tell him that manage-ment kept some of the servicecharge.

A second lawsuit was filed by thesame law firm against the HiltonHawaiian Village in Waikiki over notdisclosing that 100 percent of servicecharges for a $22,700 weddingreception were not given directly totipping employees.

The law firm is seeking to estab-lish a class action lawsuit for allcustomers who paid service chargesto the hotel for the last four years.The Hawaii law allows for triple

damages plus attorney and courtfees. However, if the lawsuits arewon, it is not clear how the courtswill calculate damages.

Workers sue

In a third lawsuit, a former waiterat the Pacific Beach Hotel in Waikikiis suing hotel owner HTH Corpora-tion for keeping part of the 17percent service fee it charged forbanquets and group functions. His

The states of California, New York,and Massachusetts have laws thatprohibit management from requiringtheir employees to share tips withmanagement or certain non-tippedemployees. Employers may violatethe law when they require tip-pooling arrangements which givesome of the tips to supervisors andback-of-the-house workers who haveno customer contact.

It took almost four years, but anOctober 8, 2004, lawsuit againstStarbucks for allowing shift supervi-sors to share in a tip pool finallywent to trial. It was certified as a

suit seeks full payment of the servicefee for the last four years for alltipping employees who worked at thePacific Beach and Pagoda hotelsowned by HTH.

Unlike the other lawsuits whichinvolve customers, this suit seeks toestablish workers as the injuredparty. This is the first such case filedin Hawaii and the VOICE will keepyou informed of what happens whenthis case goes to trial.

Workers win tip pooling lawsuitsclass action lawsuit in 2006. InMarch 2008, a San Diego CountySuperior Court ruled againstStarbucks and ordered the companyto pay as much as $100 million to120,000 current and former employ-ees as their share of tips illegallypaid to shift supervisors for the lasteight years.

Starbucks maintains the shiftsupervisors are ordinary workerswho should be allowed a share of thetip pool. The company has appealedthe court’s ruling.

Similar cases are going to trial orhave been settled in other states.

In December 2008, a number of Hawaii hotels weresued for not informing customers that managementwas keeping some of the service charge or gratuityfee automatically added to banquets and food andbeverage functions.

for one day. The Executive Committeeand trustees will also try to completetheir work in one day meetings.

Hawaii’s tourism industry will behit hard as two of our largest andmost important sources of visitors,Japan and California, are in reces-sion. Military spending is expected togrow and the construction industrywill benefit as work begins on the railsystem for Honolulu. However, thiseconomic activity is mostly on Oahuand does little to benefit the neighborislands.

Hawaii Island has been hardest hit

Understanding what caused the economic crisis—from page 3

at their investments to determinetheir potential losses from sub-primedefaults. The banks realized therewas no way to assign a value to theseCDO investments because they werebundled together with other assets,and no one knew how much of it wasbacked by sub-prime mortgages,which could be anywhere from 45 to70%.

By 2007, the questionable value ofmortgage-backed securities became amajor problem. How much of thesesecurities were based on sub-primemortgages? How many of these sub-prime mortgages would foreclose at aloss? Foreclosures can take months tocomplete but usually result in a lossof around 20-25 percent. IndividualCDOs are based on hundreds or eventhousands of mortgages and it wasnearly impossible to quickly place areal value on the CDO. The CDOscouldn’t be sold and couldn’t becashed out. For all practical pur-

poses, CDOs had to be valued asworthless.

Lehman Brothers became the firstcasualty when they were forced intoChapter 11 bankruptcy in September2008. The company had investedheavily in mortgage backed securi-ties and was supposed to worth $600billion. Over 100 hedge funds usedLehman as their broker.

Merrill Lynch also found itselfwriting down billions in losses. Thecompany was bought by Bank ofAmerica.

Many of these companies hadpurchased Credit Default Swapswhich was supposed to limit theirlosses. But AIG and Lehman Broth-ers had sold billions of dollars ofCredit Default Swaps and didn’thave the cash to pay. LehmanBrothers went bankrupt and AIGwould also have gone bankrupt if theUS government had not given theman emergency loan of $85 billion.

by the downturn in visitor counts—almost every hotel on the island lostrevenue.

Some of the drop in visitor counts in2008 was due to the sudden closureand bankruptcy of Aloha Airlines andATA, the relocation of two NCL cruiseships out of Hawaii, and record highfuel prices which caused airlines toadd fuel surcharges to their fares. Inmid 2008, Japanese visitors, forexample, were paying Japan Airlinesan extra $282 in fuel charges alone.JAL has lowered the surcharge to $82

in January 2009. Korean Air Linesand other carriers have also loweredtheir fuel surcharges for 2009.

Maui’s visitor industry was both upand down. Some hotels lost businessand some hotels gained business. Thepeople who can afford to stay atluxury hotels continue to go onvacation even during recessions, andILWU organized hotels on Kauai andLanai did better than most. However,there is growing evidence that eventhe very wealthy are beginning to cutback on their spending.

monthly payments. Housing pricesalso began to fall and many newhome owners found they owed moremoney than their homes were worth.

Home owners did what they couldto keep up with payments—they tooka second job, cut back on theirspending, moved in with theirparents and rented their house, orsold their homes at a loss. Some wereable to refinance their loans, butabout 25 percent of the sub-primeborrowers just stopped paying theirloans.

Mortgage companies and bankstook possession of these homes, butas housing prices fell, many of theseproperties were sold at a loss. Over200 mortgage companies wentbankrupt.

About 1 million ARM mortgagesare scheduled to reset each year in2009 and 2010, leading to moreforeclosures and bankruptcies.

Lack of government regulation and

Collateralized Debt Obligations(CDOs) were the primary cause ofthe crisis. They were a new productpushed by the biggest and mostrespected investment banks such asLehman Brothers, Bear Stearns,Wachovia, and Goldman Sachs thatboasted yearly returns of 10% andeven 20%—compared to 5 percent orless from the best business stocks.

Rating agencies such as Standardand Poor gave these bonds theirhighest rating of AAA because theybelieved them to be sound.

By the end of 2006, it is estimatedthat US investment banks sold closeto $2 trillion of CDOs in the globalmarket. Pension funds bought asmuch as $500 billion of these CDOs.

In April 2007, sub-prime borrowersbegan to default on their loans,leading to the bankruptcy of NewCentury Financial which specializedin sub-prime mortgages.

Banks began taking a closer look

January/February 2009 VOICE ILWUOF

THE page 7

T i p s o n t i p s

VEBA Retiree Benefit Plan - On Oahu - 441-8600 or

Neighbor Islands Toll Free (888) 256-3573.

Proven techniques to increase your tips - Part 2

Yes? Then read Michael Lynn’s “Mega Tips: Scientifically Tested Techniques toIncrease Your Tips.” Lynn explains 14 methods that are proven to increase your tips.Prof. Lynn’s has given us permission to reprint his tips in the Voice of the ILWU. Inthe Nov-Dec 2008 issue we printed Tip #7 - Repeat Customers’s Order and #11Smile.

“Mega Tips” can be freely downloaded from--www.hotelschool.cornell.edu/chr/pdf/showpdf/chr/research/tools/LynnMegaTipsFinal.pdf. Or call your ILWU DivisionOffice or write to ILWU, 451 Atkinson Drive, Honolulu, HI 96814 and we’ll mail youa copy.

Last month we covered tip numbers 7 & 11, and this month we covernumbers 1, 2, and 12. Look for next issue of VOICE of the ILWU,when we will give your more “tips on tips”!

1. Wear something unusual (like a flower) - increases tip by 17%(Jan./Feb. 2009 VOICE)

2. Introduce yourself by name - increases tip by 53% (Jan./Feb.2009 VOICE)

3. Suggesting drinks, appetizers, deserts - increases tip by 23%.4. Squat next to the table - increases tip by 20-25%.5. Touch your customers - increases tip by 22 to 42%.6. Telling customers a joke - increases tip by 40%.7. Repeat customers’ orders - increases tip by 100% (Nov./Dec. 2008

VOICE)8. Call your customers by name - increases tip by 10%.9. Draw on the check - increases tip by 18%.10. Use check folder with credit card insignia - increases tip by 25%.11. Big Smile - increases tip by 140% (Nov./Dec. 2008)12. Write “Thank you” on the check - increases tip by 13% (Jan./Feb.

2009 VOICE)13. Forecast good weather - increases tip by 18%.14. Give customers candy - increases tip by 18-21%.

Are you a tipping category hotel worker? Do you wantto increase your tipping income by 10 to 30 percent?

MEGA Tip #1: WEAR SOMETHING UNUSUAL

Although you must usually wear a server’s uniform at work,

add a distinctive element of clothing, jewelry, or other adornment

to your uniforms so that you stand out. This will help customers

perceive you as an individual person rather than a faceless

member of the staff. Along that line, I still remember one wait-

ress at a NYC restaurant who waited on me several years ago.

She wore a goofy hat that no one else in the restaurant was

wearing. Wearing that hat made the waitress seem more inter-

esting and personable, and it increased the tip she got from me.

More formally, similar effects of adornment on tipping were

observed in a study by Jeri-Jayne Stillman and Wayne Hensley.

For this study, six waitresses at an upscale restaurant agreed to

record information about their dining parties for four nights and

to wear a flower in their hair for two of those nights. Which two

of the four nights the flower was worn was determined randomly

for each server. Each night, those waitresses in the “flower condi-

tion” were “provided a selection of flowers from which one was

chosen for the evening.” The results indicated that the waitress’

tips increased from about $1.50 per customer in the control

condition to about $1.75 per customer in the flower condition.

Thus, they earned 17 percent more in tips simply by wearing

flowers in their hair.

The results of this study suggest that (if possible) you should

wear something distinctive or unusual when you work. Whether

it is a flower in your hair, a loud tie around your neck, or a funny

button on your shirt, wearing something that stands out will

personalize you to your customers and should result in larger

tips. However, take care not to wear things with political, reli-

gious, or otherwise controversial messages and meanings so as

not to offend those customers with different points of view.

Mega Tip #2: INTRODUCE YOURSELF BY NAMEIntroduce yourself by name when greeting your customers. Ifdone properly, these introductions make you seem friendly andpolite and make the customer feel more empathy for you. Both ofthese effects should increase tips.

Kimberly Garrity and Douglas Begelman tested this expecta-tion in an experiment conducted at a Charlie Brown’s restaurantin southern California. The study tested two-person parties whocame to the restaurant for Sunday brunch. Each of these partieswas randomly assigned to one of two conditions. In the “namecondition,” a waitress approached her tables, smiled, and said“Good morning. My name is Kim, and I will be serving you thismorning. Have you ever been to Charlie Brown’s for brunchbefore?” In the “no-name condition,” the waitress used the sameapproach, smile, and greeting, except that she didn’t give hername. This manipulation had a large and statistically significanteffect on tips. The waitress received an average tip of $3.49(15%) when she did not give her name, but she received anaverage tip of $5.44 (23%) when she did give her name. So, thiswaitress earned almost $2.00 more from each table simply byintroducing herself by name!The results of this study suggest that you should introduceyourself by name to your tables. Of course, these self-introduc-tions need to be made with a genuine and professional attitude.Surly or insincere introductions are likely to backfire. The words“Hi, I’m ... and I will be serving you this evening” can be irritat-ing if said in an uncaring or automatic way—especially if theysound scripted. However, if you introduce yourself in a sincereand professional way, customers should leave you larger tips.

MEGA Tip #12 : WRITE “THANK YOU” ON CHECKSTry writing “Thank you” and signing your name on the backsof checks before you deliver them to your customers. Theseexpressions of gratitude will make you seem friendlier, whichshould increase your tips. Expressions of gratitude may alsomake customers feel obligated to earn that gratitude by leavinglarger tips. Whatever the mechanism involved, expressions ofgratitude are likely to increase the tips you receive.Bruce Rind and Prashant Bordia tested this expectation at anupscale restaurant in Philadelphia (where they also testedSmiley faces). A waitress, whom we will call Anne, conductedthis study by randomly assigning her lunch customers to one ofthree conditions. On the back of the check she wrote nothing,“Thank you,” or “Thank you, Anne.” As expected, this manipula-tion significantly affected the size of the waitress’s tips. Shereceived an average tip of 16 percent when she wrote nothing atall, but she received an average tip of 18 percent when she wrote“Thank you” on the back of the check. Adding her signaturemade no further difference in tip levels, compared to thanksalone.

Since there is little downside to expressions of gratitude, youshould always write “Thank you” or some comparable messageon the backs of your checks. To avoid time pressures during busyshifts, you can write these messages on your checks beforecustomers arrive. Doing so will only take a few minutes of yourtime and should Increase your tip income.

14 methods of increasing your tips

“Mega Tips” can be

freely downloaded from

www.hotelschool.cornell.edu/chr/pdf/showpdf/chr/

research/tools/LynnMegaTipsFinal.pdf.

VOICE ILWUOF

THEpage 8 January/February 2009

N e w s A r o u n d t h e U n i o n

ILWU Division Offices - Hawaii (Hilo) - 935-3727; (Honokaa) - 775-0443; Maui - 244-9191; Kauai - 245-3374; Oahu - 949-4161.

Built in 1968, the Mauna Kea Beach Hotel was severelydamaged in the 2006 earthqauke and had to close foralmost two years to make extensive repairs. The hotelreopened in December 2008 and most of the workers willbe recalled to work this year.

Pineapple caucus members from Dole Pineapple and Maui Land & Pineapplemet on January 16 to discuss their upcoming contract negotiations. Seated:Samuel Ramirez, Harold Gouveia, Douglas Cabading, Mathew Rodrigues,and Avelino Martin. Standing: Oahu Division Director Dave Mori, MauiBusiness Agents Delbert DeRego and Teddy Espeleta, Oahu Business AgentBrandon Bajo-Daniels, Arnold Kalilikane, and Glenn E. Murayama.

Newly organized ILWU members of the Yukio Okutsu State Veterans Home inHilo approved a new contract. The 95-bed facility provides long-term care toeligible US veterans. It opened in 2007 and is the first veterans home to bebuilt in Hawaii. (L-r) BJ Greig, Rachel Segawa, Business Agent Isaac FiestaJr., and organizer Raynette Filoteo.

Harriet Bouslog Labor Scholarship will increase to 10statewide for $1,000 a semester, up to 8 semesters, at any UHcampus offering bachelor’s degrees. This will include UH-WestOahu as well as Maui, which is now offering bachelor’s degrees.

Scholarship applicants will be required to interview their familymember who is an active or retired ILWU member. If the familymember is deceased or otherwise unavailable for interview,another ILWU member may be interviewed. The interview shouldbe at least 30 minutes in length.

The applicant will also be required to write an essay aboutlessons from the interview and what the role of the ILWU andother unions should be for the applicant and others in the future.

Applications will be available at Division Offices soon; contactthe office nearest you for more information

Harriet Bouslog LaborScholarship changes

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Hapuna wins statebasketball tourney

HONOLULU—The Hapuna BeachHotel basketball team beat out ILWUchamps from the Big Island, MaunaLani, to make it to the state tourna-ment—then blew away thecompetition from Kauai and Oahu tobecome the ILWU 2008 basketballchampions on December 13.

Hapuna beat Ball Corp. 46-27 inone semi-final, and Pepsi defeatedTeam Kauai 55-33 in the other. Theconsolation bracket saw Team Kauaiedging past Ball Corp 40-38, andHapuna beat Pepsi 46-40 for thechampionship

The All Tournament Team mem-bers were: Alston Viernes, Brennen

Pasco (Hapuna); David Zane (Pepsi-Oahu); Felipe Aguiaho, Joel Green(Team Kauai); and Mike Monis (BallCorp.)

The tournament Most ValuablePlayer was Alston Viernes, andBrennen Pasco won the half-timeThree-point Shooting Contest.

Thanks go out to Division SportsCoordinators Brian Tanaka andLarry Ruiz, Lance Kamada of theHonolulu Advertiser for volunteeringas scorekeeper/statistician for thetournament, and Kenneth Ige ofServco Pacific Inc. for serving asscorekeeper/statistician for the OahuDivision regular season basketball.

Victory for mistreated mariners—continued from page 1

Mauna Kea Beach Hotel reopens

Organizing success at YukioOkutsu State Veterans Home

Pineapple industry caucus held Jan. 16

made by Local 142 longshore work-ers and from concerns expressed bymembers of the Masters, Mates, andPilots Union who operate tugsneeded to move the vessel.

After some negotiating, the com-pany agreed to sign an ITF- approvedunion contract providingcrewmembers with $1,000 in backpay, raises of 30%, and contractlanguage prohibiting discrimination.Also included in the agreement werereplenished medical supplies, bettersafety training, and a new stock offresh fruit and vegetables. A Christ-mas tree, long sought by manycrewmembers, was the deal-closer.

ILWU International Vice Presi-dent for Hawaii, Wesley Furtado,feels that the groundwork for thevictory came from last year’s trainingeffort. “When Jeff came to Hawaii

last March, he trained TyroneTahara, Warren Ditch, Brad Scott,Dennis Morton, and Sean Dacuycuyto respond to situations exactly likethe Japan Tuna incident. All ourlocal guys deserve credit for applyingthat training and succeeding onbehalf of these Filipino seaman. Thiswas the first opportunity for ourguys to prove themselves, and theyreally stepped up.”

The exploitation of maritimeworkers, including crews of ships, isa longstanding problem, but Engelsis confident that the Hawaii teamcan handle the next situation ontheir own. “It’s a great feeling thatthe ILWU and ITF now have teamsin place that can help workers winsome justice with solidarity andaction.”

Applications must be submitted by April 2009.