Wages and Automation: Dockworkers Strike at Ports from Maine to Texas
Nationwide Ports Strike Underway from Today
The longshoremen walked off the job at 36 ports from Maine to Texas after a contract covering workers there expired Tuesday at midnight. It marks the first big strike by the union, whose 45,000 members are represented by the International Longshoremen’s Association (ILA), since 1977. The workers are calling for higher pay as well as some assurances that they will not be replaced by machine overtime, leading to job loss.
Protestors gathered at several ports including the Port of Philadelphia and Port Houston after negotiations on a contract continued into Monday, but ultimately stalled without reaching an agreement. If the strike goes on for more than a few weeks, some of these supply chain disruptions would start to matter — and could drive inflation or consumer-price increases alone with goods shortages in extreme cases.
Demanding Decent Pay, Job Protection
One of the ILA’s main requests is for a raise in pay. According to union leaders, shipping companies made huge profits by hiking charges on the back of the pandemic and it is now time for workers to profit. In addition, Boise Butler, ILA local president, emphasized the importance of a fair contract and advocated for language that would prevent job loss due to automation. Some picketing workers carried signs reading, in effect: “Automation Hurts Families”, reflecting the union’s position against any additional automation.
The union is coming to the bargaining table “opposing a strike until the cows come home,” ILA President Harold Daggett said. “We are strong,” he emphasized, referring to how necessary the union is for the economy of the United States and what a powerful lever it holds against shipping companies.
Differences in wage increases and automation
The ILA’s first proposal featured a 77 percent wage increase over that time frame to combat inflation and years of stagnating wages for workers. Currently, ILA members make a base salary of approximately $81,000 a year but earn incomes topping $200,000 depending on overtime. In response, The U.S. Maritime Alliance — representing port operators — retaliated with a deal seeking 50% wage hike and continued limits on robot drilling efficiency.
Yet, the union has opposed this diet plan, requiring a total automation restriction and more[1] wage hikes. Formal negotiations with the alliance, however, were halted in June and have not resumed.
Effect on the U.S. Economy and Supply Chain
Labor experts say the work stoppage likely won’t directly affect consumers right away but that an extended strike would have widespread ripple effects. These delays in the supply chain are not only expected to affect perishable items such as bananas. The American Farm Bureau Federation said the affected ports manage 75% of the nation’s banana imports.
Businesses, especially with the holiday shopping season approaching, could see delays and added costs if the strike continues. The Journal says J.P. Morgan estimates the U.S. economy could lose between $3.8 billion and $4.5 billion a day, with some of that abating once cargo moves again through ports.
We discuss the political implications of this situation as well as what we think the government should do.
The strike could become a political issue ahead of an April presidential election if it results in widespread shortages. Some sectors like retailers and auto parts suppliers are hoping that President Joe Biden might step in under the Taft-Hartley Act which allows a president to call for an 80-day cooling off period.
But Biden told reporters on Sunday he had no plans to get involved. But his administration has engaged the two sides repeatedly to come up with a fair settlement.
With the strike set to continue the pressure is increasing on both sides to cut a deal and end any more disruption of the country’s economy.