On a day when the nation paused to recognize labor, more than 100 state workers waved signs in front of the state Capitol to protest layoffs, thousands of union workers attended a unity picnic at the Waikiki Shell, and the state and the Hawai'i Government Employees Association continued to meet privately in binding arbitration over a new contract.

While Labor Day was a time for many families to hit the beach or the barbecue, the union events were a reminder of how the labor movement is struggling during the recession.

Several public-sector union workers said they believe they have been unfairly portrayed in the dispute with Gov. Linda Lingle over new contracts.

"They seem to think we're the villains," said Bud Borges, a United Public Workers painter who attended the unity picnic. "I don't know why, because we pay taxes like everybody else."

Shawn Colotario, a UPW corrections officer, took his sister and family to the unity picnic for a day out. "The governor has done a good job of destroying union representation, but if you ask any worker, it's a different story," he said.

"We try not to respond to the attacks by the governor. What we do is try to educate our family and friends."

More than a hundred state workers and their supporters waved signs at the state Capitol urging Lingle not to go through with layoffs.

Lingle has ordered more than 1,100 layoffs, starting in November, to help with an estimated $884 million budget deficit through June 2011. The governor has said the layoffs are necessary after unions blocked her furlough plans in court.

The state and the HGEA, UPW, Hawai'i State Teachers Association and the University of Hawai'i Professional Assembly are negotiating new contracts.

Clifford Oliveira, the husband of a state worker, said his family's expenses keep rising, including water and sewage bills, making it hard to pay all their bills.

"We will be living like the homeless," Oliveira said.

Representatives of the state and the HGEA appeared before an arbitration panel yesterday in a conference room at the state Department of Labor and Industrial Relations to work toward a contract resolution.

The arbitration hearings, which started Friday, have been closed to the public and the news media by the neutral arbitrator presiding over the process. A final decision is scheduled for late December.

State Sen. Brickwood Galuteria, D-12th (Waikiki, Ala Moana, Downtown), who helped produce the unity picnic, said he believes it was important for private- and public-sector workers to come together.

"Everybody looks for fairness, but what does that mean in this new economy we've got here?" he said. "I don't think that anybody has lost faith in unions. I think at this particular time, we just have to work harder to find solutions."