Today, nearly 50,000 union longshoremen went on strike against the nation’s East and Gulf Coast ports, seeking better pay.
About 68% of shipping export volume and 56% of imported cargo flow through the ports involved. This strike will stop the flow of a significant portion of everyday consumer goods, from food to clothing to automobiles, into and out of our nation. Perishable items such as bananas and sugar, raw materials such as cotton and wood, and non-perishable items like furniture and appliances all travel from international markets to U.S. shores and are processed through the affected ports from Maine to Texas.
If the strike is protracted, not only would it be disruptive to commerce, but it would have rippling impacts across the economy that will hurt Americans and make for a ho-humbug Christmas holiday season.
What’s Happening
The International Longshoremen’s Association (ILA) reportedly demands that the United States Maritime Alliance (USMX), the maritime alliance representing the major shipping lines, terminal operators, and port authorities, hike pay for workers from $39 an hour to $69.
Longshoremen also seek to ban the use of automation at ports out of fear that technology will put them out of work permanently.
“We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve,” ILA President Harold Daggett said.
The economic impacts cannot be overstated. A strike could cost the economy anywhere from $4 billion a week to $7 billion a week. Right now, cargo is already sitting at ports and will be untouched until this dispute is resolved. To demonstrate the magnitude, there are nearly 100,000 containers in New York City-area ports alone waiting to be unloaded and 35 container ships headed to New York over the coming week.
Meanwhile, ports in California are already beginning to be clogged up as some retailers rushed Halloween and Christmas merchandise early in to other ports in preparation for the strike. Those will take time to be processed and transported.
3 Ways Americans Will Be Affected
If the strike drags on, consumers can expect to feel the impacts in several ways:
- Rising prices: Inflation and elevated prices from 2021 still frustrate consumers. An extended strike beyond a week or two may push prices higher. Wholesalers and retailers are already expected to pass the higher transport and shipping costs onto consumers.
- Limited supplies: Cargo stuck in ports will not get to store shelves, leaving fewer options and supply chain disruptions. Fresh and perishable goods may grow more difficult to come by. Big retailers say the holiday shopping season should not be affected too much, but what about small businesses without the same resources to rush in goods?
- Job Furloughs and Losses: Jobs connected to the port may be affected, such as truckers delivering goods, warehouse workers, manufacturers, and other workers dependent on the ports. These workers could be furloughed or let go if this strike is prolonged.
Washington Needs To Act
President Biden and his administration can step in to force a resolution to this labor dispute. Under the 1947 Taft-Hartley law, the president can intervene to either prevent or end a strike and impose an 80-day cooling-off period.
However, Biden has boasted about being the most labor-friendly president in history and does not want to pay a political price for crossing the striking union. Vice President Harris has touted her pro-union support and does not want to sacrifice a key voting block as well and is unlikely to nudge her boss to intervene.
Unfortunately, regular Americans and port-dependent workers are held hostage until this is resolved. The Chamber of Commerce called on President Biden to act, saying, “Simply put, you have the authority to keep contract negotiations going while keeping the ports open.”
The American people need him to put union politics aside for the good of the economy and the country.