The ancestors of Shin Nakagawa and Adrian Lobetos were brought to this beautiful spot on Oahu in the 1800s by giant companies that needed Japanese and Philippine workers to cut sugar cane in the era when sugar was king of the islands.
Hawaii's cane-cutters rose from squalid plantation camps and low wages to become the highest-paid agricultural workers in the world as the industry prospered and, in the 1940s, its workers joined the International Longshoremen's and Warehousemen's Union (ILWU).
But now, economic changes are sweeping through Hawaiian plantations like trade winds, threatening the jobs of sugar workers and buffeting the islands' economy.
"We feel like the future is out of our control," said Lobetos, 30, a welder who repairs cane-harvesting machinery at Oahu Sugar Co. "Every day we hear news about the foreign sugar, the cheap sugar. And workers are afraid . . . . Many of us will end up on unemployment."
The sugar industry and its work force are shrinking because of low-wage foreign competition and alternative sweeteners. Coca-Cola, for example, used Hawaiian cane sugar until switching to cheaper high-fructose corn sweetener five years ago.
As its most unionized, high-wage industry declines, Hawaii faces a question other regions have encountered: Can growth in the service sector -- in this case, the tourist trade -- provide enough meaningful jobs to compensate for the decline in the sugar cane market?
The islands' problems cannot be seen on crowded beaches, busy shops and luxury hotels of Waikiki. But they are glimpsed in the substandard and overcrowded housing of many workers and in the departure of roughly one-third of young Hawaiians seeking better jobs.
Hawaii's 300,000 acres of spiky sugar cane stretch from its white sandy beaches to its jagged volcanic peaks, but for many of the 25,000 workers whose livelihood directly or indirectly depends on sugar, the industry's problems are intensified. The 16,000-acre Puna plantation closed last fall; more than 60 percent of its 500 workers remained jobless nearly a year later, according to the Hawaii Economic Opportunity Council.
"You talk about America's idle steel mills and closed-down coal mines. Well, it's the same thing here . . . . We've got 30 percent of our acreage lying fallow, and four of 17 plantations gone" in the last decade, said Robert H. Hughes, a fourth-generation Hawaiian who was born on a Maui plantation and is now president of Hawaii Sugar Planters Association. He said three of the remaining 13 plantations are likely to close in the next two-year crop cycle.
The key issue for sugar -- as it is for steel, coal and other basic commodities -- is whether and how best to protect U.S. industry from foreign competitors that heavily subsidize their producers.
Plantation owners and the ILWU are lobbying Congress to continue protecting the industry when the House and Senate take up the farm bill next month. They want to maintain the sugar price-support loan program that guarantees growers 18 cents per pound and keeps cheaper foreign sugar from capturing more than 30 percent of the market.
"What is America's goal?" Hughes asked. "Shouldn't it be to provide a decent standard of living for our own people? Or should we let foreign countries do us in?"
But the sugar lobby's position is opposed by competing corporate interests -- such as the Sugar Users Group, which includes sweet-toothed giants Coke and General Foods -- that want access to the cheaper sugar produced in such places as the Dominican Republic. There wages are as low as $3 a day and sugar is produced for the world market, where it sells for less than 5 cents a pound.
The industry's trouble can be traced to 1974 when Congress allowed the expiration of the 1934 Sugar Act, which set quotas by country. Once the floodgates opened for foreign sugar, the market fluctuated wildly with prices raging from 65 cents a pound to 9 cents.
In 1981, the bottom fell out for Hawaiian sugar when the industry lost $90 million in the sugar market crash. World prices plummeted because of an oversupply of sugar from the Third World and Europe, where governments heavily subsidize their growers, who then export their surplus very cheaply.
Congress then intervened and enacted the current support program that acts as a life-support for domestic sugar.
"We are not Third World workers, and we can't live on Third World wages, especially in Hawaii," said Thomas Trask, ILWU's Hawaiian-born regional director. The average home here sold for $183,000 this year, according to real estate industry data. The cost of living is 26 percent above the national average. Wages, meanwhile, have declined 12 percent since 1970 when measured against inflation, according to the Census Bureau.
Sugar workers earn $8 to $9 per hour, receive comprehensive medical insurance and often live in company-provided, low-rent housing under ILWU contracts. Lobetos, for example, pays $78 a month to rent what he describes as a small but "livable" two-room home for his wife and two children.
ILWU, the state's largest private-sector union, has made substantial concessions to save jobs. It accepted a three-year wage freeze, reduced overtime and curbed featherbedding.
"We freeze our pay. We are trying hard to cut our production costs . . . . But we can't compete with foreign dumping," said Nakagawa, 61, who has worked at Oahu Sugar for 43 years and heads the union there.
"We depend on Congress to do the right thing for us," Nakagawa said, "If Congress understands we are working hard to cut our costs, maybe they would help us."
Tourism has replaced sugar as king of the islands, as 4 million visitors a year (outnumbering natives 4 to 1) pump $4 billion into the economy and support one of every four jobs.
But overdependence on tourism poses future problems because the tourist trade fluctuates and because Hawaii is becoming a lower-wage service economy. While many sugar workers earn close to $20,000 annually, retail jobs here average about $10,000, and hotels and other service jobs average less than $15,000, according to 1983 state Labor Department data.
"Tourism functions like a modern-day plantation economy. It brings in cheap, entry-level jobs, but upward mobility is highly restricted," said Gregory Pai, chief economist of First Hawaiian Bank. "We are creating a lot of lower-level service jobs, but we are losing the cream of our crop" of young people, creating what some call "tropical brain-drain."
Stagnant job-creation and underemployment are key problems, Pai said. In the 1970s, the tourist boom helped create 10,000 new jobs a year, roughly matching the new entrants to the labor force. But job-creation has slipped to about 2,000 yearly in the 1980s, he said. Unemployment is officially at 5 percent, Pai said, but added that the statistic is misleading because many jobs are part-time and seasonal.
"There are just not too many opportunities here unless you want to flip hamburgers or clean hotel rooms," said Elias Ramos, professor of business at the University of Hawaii. "It is a society of many servants."
Sugar was once the backbone of Hawaii's economy, providing 56,000 jobs at its peak in the 1920s, with many more jobs in sugar-related supply firms. Mechanization and competition have reduced the work force to 7,000, with about 18,000 support jobs.
Agriculture now ranks third behind tourism and the military in Hawaii. But sugar is still a significant part of state revenues, Hughes said, contributing $200 million in payroll and benefits, and more than $100 million in state tax revenues, or 10 percent.
Native Hawaiians like Hughes and Trask of ILWU say they think that part of sugar's problem is one of corporate and generational change. The original sugar companies were founded by descendants of Hawaii's missionary settlers. The firms grew and dominated Hawaii. But now mainland interests control them; and younger executives, no longer wedded to the islands, are more likely to close marginally profitable operations, they said.
"Sugar is Hawaii. We are all different nationalities here because sugar brought us here," Trask said, "It's what makes these islands beautiful . . . and we are going to fight like hell to keep it."