East Coast Ports Grind to a Halt over Labor Strike Demand for 77% Wage Increase
After three days of striking, the International Longshoremen’s Association (ILA) went back to work on Friday, suspending their strike until January 15 and tentatively agreeing to a 62% wage increase over the next six years. The sudden end to the strike reflects a desire to “not spoil the election for Democrats,” suggests National Review’s Jim Geraghty, because the consequences of the strike could have been devastating.
The ILA combines the dockworkers at all ports on the Atlantic and Gulf Coasts, while West Coast dockworkers have a separate labor union. With these dockworkers on strike, every port from Maine to Texas was effectively shut down, with no cargo ships being loaded or unloaded. “This isn’t a run-of-the-mill strike,” warned labor lawyer Peter Kirsanow. “It’s estimated that the strike’s economic impact could range from a low of $2 billion per week to $4 billion per day.”
The strike would most impact the states on the eastern seaboard that are closest to the affected ports and furthest from those still operating. For goods sold in, say, North Carolina, it is much more efficient to ship them to the Port of Wilmington and transport them a couple hours by truck than it is to ship them to the Port of Los Angeles and haul them all the way across the country by train, and then place them on a truck. Less efficient shipping methods translate into higher transportation costs, which are inevitably passed on to consumers.
As an aside, it may be relevant at this point to clarify that the port strike would only affect imported and exported goods, not those made and consumed in the U.S.A. Most toilet paper, for instance, is produced domestically and is unaffected by the strike, except when people panic and choose to hoard it. But imported goods from pharmaceutical products to coffee beans remain very important. Now back to the main storyline.
These hardest hit areas include areas of Florida, Georgia, South Carolina, and North Carolina, which are still recovering from the devastation wrought by Hurricane Helene. “I think it’s totally unacceptable to try to intentionally deprive people of the supplies they need to be able to rebuild their homes when they’ve been displaced [by] a natural disaster,” declared Florida Governor Ron DeSantis (R). When the longshoremen went on strike, DeSantis deployed the Florida national guard and Florida state guard to ports “to maintain order and if possible resume operations.”
Leading up to Tuesday’s strike, the longshoremen had shown themselves to be quite unreasonable in negotiations. The ILA first demanded a 77% wage increase and a moratorium on automation technology in U.S. ports. This would increase the base hourly rate for ILA members from $39 to $69.
The U.S. Chamber of Commerce argued that automation technology “improves productivity,” meaning “containers and goods move quickly through ports, helping keep transportation costs low.” They add that “these updates are badly need[ed] because today U.S. ports rank as some of the least productive in the world.”
In response to these demands, the U.S. Maritime Alliance (USMX), which represents the port employers, counter-offered dockworkers a 32% raise, the same increase that West Coast dockworkers received last year (West Coast dockworkers now have a base hourly rate of $52.85). The ILA turned that offer down. The USMX offered them a 40% raise, and again the ILA turned it down.
In a last-minute bid to avoid a strike, USMX offered striking workers a 50% pay increase, triple the employer contribution to retirement plans, an increase in health-care benefits, and a continued moratorium on automation.
The ILA turned that offer down and went on strike anyways. Union boss Harold Daggett refused to budge on any of the ILA’s outrageous demands, threatening, that unless their demands were met, the strike could “last very long” and dockworkers could “cripple” the economy.
At this point, President Joe Biden should have jumped into action. The Taft-Hartley Act, enacted in 1947, empowers the president to obtain a court order to halt strikes that “imperil the national health or safety,” requiring an “80-day cooling off period,” explained Rep. Randy Weber (R-Texas) on “Washington Watch” Thursday.
It’s possible that the ILA expected Biden to invoke the Taft-Hartley Act. Allowing an economy-crippling strike to proceed a month before Election Day would be a politically unpopular decision that would hurt his party in the upcoming election. So, Biden had a clear incentive to invoke Taft-Hartley and suspend the strike for 80 days.
The 80-day time window may have also figured into the union’s decision to strike when they did. A strike delayed until 80 days after October 1 would resume around December 19. That is, it would resume well after the election, so Democrats face no blowback for supporting strikers; but before the next administration assumes office, so a Trump victory would be irrelevant. It would also occur right in the middle of last-minute Christmas shopping, generating maximum public outcry and exerting maximum pressure on the ports to get business up and running again. If that’s what the union was planning, it was a genius strategy.
Instead, Biden said he didn’t “believe in Taft-Hartley,” demanded that USMX needed to “come to the table and present a fair offer,” and left Washington for his beach home. “President Biden is missing in action,” complained Weber. Genius strategies are useless when they rely on people to act rationally, and then those people behave irrationally.
Other administration officials backed up Biden’s foolishly unconditional support of the dockworkers’ strike, including Transportation Secretary Pete Buttigieg. “This strike is about fairness,” insisted Vice President Kamala Harris. “The Longshoremen, who play a vital role transporting essential goods across America, deserve a fair share of these record profits.”
The ILA’s gambit had failed. The economy-crippling strike would hurt Democrats’ chances in the election, especially in hurricane-impacted swing states like North Carolina and Georgia. Their intransigent negotiating style — not to mention their boss’s lavish lifestyle and mafia ties — would win them little sympathy elsewhere. Would the ILA sink their reputation for one contract?
At this desperate moment, the port alliance provided a face-saving retreat for the union. They offered even more concessions, offering a 62% raise over six years, which would boost the base hourly rate for dockworkers from $39 to $63, with further details to get ironed out later. This deal was good enough to get the dockworkers back to work, at least until January 15.
It may take several weeks to clear the delay caused by even a three-day strike, but America’s East Coast ports are open for business again. For once, Americans were spared the worst effects of President Biden’s poor decision-making, and resources will continue flowing into areas devastated by the hurricane. And, of course the other undeserving beneficiary of the strike’s quick resolution is Kamala Harris’s presidential campaign.
Joshua Arnold is a senior writer at The Washington Stand.