1 - American Memory

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THE 1S72 WEST COAST UABrTIME STRIKE
The Masters, Mates and Pilots Union struclt the Pacific Maritime Association
on October 25,1&72, just before the critical holiday shopping season, leaving many
Hawaii stores without their Christmas goods. A strike was not expected, and
when it came, news reports anticipated only a brief stoppage. But the strike
lasted 41 days—until December 4. A union of approximately 300 members was
able to tie up the whole Pacific Coast merchant fleet of 67 ships for 41 days, cut-
ting o£f supplies for more than 800,000 people in Hawaii. The dispute was finally
settled on terms that were basically the same as those offered before the strike.
It is impossible to gauge the total impact of these transportation interruptions
on the Hawaiian economy. There is no way to measure the number of business-
men who decided not to invest in Hawaii or the number of vacationers who de-
cided not to visit Hawaii because of a strike—or even the threat of one. But the
impact is painfully clear in the Increased costs of doing business, the unemploy-
ment, and the rises in the cost of living resulting from these strikes.
The first and the hardest hit is the local business community. Retailers and
wholesalers can't get their merchandi.se; construction firms can't get their ma-
terials; farmers can't get their chemicals and feeds; and manufacturers can
neither get their supplies nor reach their usual markets.
Inured to the problem, many Hawaii firms resort to stockpiling supplies when
a strike is threatened. But the costs of extra warehousing and handling and of
borrowing or tieing up capital to build inventory are tremendous. Some businesses
devise emergency alternative means of reaching su{4>liers or markets—using air
shipments during an ocean tie-up, routing goods through East Coast ports when
West Coast ports are struck, etc. But this, too, is expensive. The squeeze on busi-
nesses was especially severe during the 1971 West Coast dock strike, when
I'ha.se I of the wage-price freeze prevented them from passing on most of these
added costs. (Whether the costs are passed on are absorbed, of course, someone
in Hawaii ends up paying.)
As the strike wears on, the impact on the business community is compounded.
Local business services and lenders suffer as accounts fall behind in their pay-
ments. Advertising volume Is reduced because merchants have nothing left to
.sell. Architects find that construction plans are put off, while employment agen-
cies find that no one is hiring.
During the local dock strike in 1949, retail sales in Hawaii fell 12.5 percent
below the same period in the previous year, while nationally they showed no
appreciable change. With many small businessmen giving up entirely, out-
migration accelerated and bank deposits declined. Farmers suffered severe short-
ages of fertilizer and feed, and some were forced to kill off part of their livestock.
Construction volume dropped precipitously, and even the number of visitors to
Hawaii was reduced.
During the 1971 West Coast dock strike, a pronounced slowing In the State's
general fund tax collections reflected the overall damage endured by Hawaii's
businesses. Revenues had increased 9 percent in the fiscal year ending June 80,
1971, the day before the strike began. But in the following five months, when
Hawaii was In the midst of or recovering from the strike, the rate of increase
in revenues slid to 2.8 percent. While it Is true that 1971 was a recession year
for Hawaii, tax revenues were up In the six months directly preceding the strike,
with June ahead of the previous ,Tune by 9.9 percent.
Responding to a survey on the Impact of the 1971 strike, local retailers reported
.sales declines ranging from 3 to 17 percent. Because of extra Inventory and
transportation costs, however, the drop in their profits was much more marked.
Profits before taxes were down 50 percent from normal for a foreign car dealer,
down 53 percent for an appliance dealer, down 25 percent for a housewares
dealer, and down 19 percent for one drug store. A domestic car dealer reported
profits down 200 percent (a loss, In other words), while for a paper products
dealer profits were down 138 percent. Most busines.'ses sun-lved the strain, but
some could not. One medium-sized furniture store struggled through the 134
days of the 1971 and early 1972 West Coast dock strikes, but it was caught
by surprise by the deck officers' strike in the fall of 1972. Christmas furniture
orders arrived too late for the holiday buying season, and the store went out of
business.
The 1971-72 strike also had a severe effect on the State's construction Industry.
Construction in progress suffered lengthy delays, Increasing costs considerably.