SB2840 – ‘Local jobs for local people’
This is a continuation of a few posts on bills that have passed through the Hawaii legislature that I am voicing my opinion on.
Recently, SB2840, also known as ‘Local jobs for local people’ was passed through the HI State Legislature. Governor Lingle vetoed the Bill, but her veto was then overridden by a majority vote in the HI Legislature. SB2840 makes it a law for all construction projects in Hawaii to be made up of 80% Hawaii resident construction workers. This is another move by Hawaii politicians that baffles me.
As Governor Lingle astutely points out, this bill will likely result in higher construction project costs and more delays in construction projects, as local companies will be fined if they don’t meet the 80% resident requirement.
Proponents of the bill support it because it keeps jobs with Hawaii residents and therefore money will stay in Hawaii.
I fundamentally disagree with this bill because it doesn’t reward contracts to the company that can do the best job at the least expensive price and puts restrictions on who companies can hire to complete a job. I see this bill as another tactical mistake by the Hawaii Legislature that will actually hurt Hawaii and its residents more in the long run than it will help in the short term. What this bill does is insulate local companies and workers from outside competition and creates an environment where companies aren’t forced to be innovative and competitive on the global scale. While local construction companies will have to be competitive with each other for jobs, I think this will allow local companies to stagnate while firms outside Hawaii become increasingly efficient. While this bill will keep jobs and money with Hawaii for now, I think we will get to a point in the future where the difference in cost between a local firm with greater than 80% local employees and outside firms is so drastic that we will be forced to allow outside firms to bid on projects.
In addition, SB2840 puts restriction on construction companies that want to do business in Hawaii on who can work on their projects. I see two primary problems with this. One, this restricts local construction companies from potentially hiring the best person for the job and is like a form of affirmative action for Hawaii residents. Two, this could limit construction companies ability to execute on jobs they’ve won if the workers needed to meet the 80% Hawaii resident minimum aren’t available because they’re committed to other projects.
I don’t want to seem insensitive to Hawaii residents’ need for jobs, and I do understand that middle class workers have been hit hardest by the recession, but I don’t think that justifies a bill that puts restrictions on who companies hire. Where will this go next? I disagree with this bill because I don’t think it is realistic, because I think it sets a poor precedent for the type of work environment Hawaii ‘fosters,’ and will ultimately hurt Hawaii’s businesses and its workforce in the long run more than it helps in the immediate future.
I hope after the recession Hawaii lawmakers will reevaluate this bill, see it’s flaws, and retract it.
**I am basing a large part of my argument on the assumption that it is not economically realistic or feasible for construction companies outside Hawaii to come into Hawaii and hire a construction crew that consists of more than 80% Hawaiian residents.
