Commercial warning as dock workers exit

Tens of thousands of dockworkers are on strike indefinitely at ports across much of the United States, threatening major trade and economic disruption ahead of the presidential election and the busy holiday shopping season.

Members of the International Longshoremen’s Association (ILA) on Tuesday pulled out of 14 major ports along the Eastern and Gulf coasts, halting container traffic from Maine to Texas.

The measure marks the first such closure in nearly 50 years.

President Joe Biden has the authority to suspend the strike for 80 days for further negotiations, but the White House has said it does not plan to act.

The talks stopped months ago and the current contract between the two parties ended on Monday.

The two sides are competing for a major six-year contract covering about 25,000 port workers Workers in container and ro-ro operations, according to the U.S. Maritime Alliance, known as USMX, which represents shipping companies, port associations and marine terminal operators.

USMX said Monday it had increased its offer, which would raise wages by nearly 50%, triple employer contributions to retirement plans and boost health care options.

Union president Harold Daggett has called for significant pay rises for his members, while expressing concerns about threats from automation.

USMX accused the union of refusing to bargain, and filed a complaint with labor organizers asking them to order the union back to the bargaining table.

Under the previous contract, starting wages ranged from $20 to $39 per hour, depending on the worker’s experience. Workers also receive other benefits, such as bonuses associated with container trading.

Mr. Daggett He pointed out The union wants to see hourly wages increase by $5 per year over the six-year contract term, which it estimated would amount to about 10% per year.

The ILA said the workers were owed after shipping company profits rose during the Covid pandemic, while inflation hit salaries. It warned of anticipating a broader strike of its members, including those not directly involved in this dispute, although exact numbers are unclear.

The union said it represents more than 85,000 people. It claimed that there were about 47,000 active members Its annual report to the Ministry of Labor.

Time-sensitive imports, such as food, are likely to be among the goods affected first.

The ports involved handle about 14% of agricultural exports shipped by sea and more than half of imports, including a large share of banana and chocolate trade, according to the Farm Bureau.

Other sectors vulnerable to disruption include tin, tobacco and nicotine, Oxford Economics said. European clothing and footwear companies and automakers, which move many of their shipments through the Port of Baltimore, will also be affected.

Imports in the United States rose over the summer, as many companies took steps to speed up shipments ahead of the strike.

“I don’t think we will see significant, immediate economic impacts,” he said. “But over the course of weeks, if the strike continues for a long period, we could start to see prices rise and some shortages of goods.” Seth Harris, a professor at Northeastern University and former White House adviser on labor issues.

More than a third of exports and imports could be affected by the strike, which would hurt U.S. economic growth by at least $4.5 billion each week of the strike, according to Grace Zimmer, associate U.S. economist at Oxford Economics, despite other estimates. The economic hit could be higher.

It said more than 100,000 people could find themselves temporarily out of work as the impact of the shutdown spreads.

“This is a really exciting event, one that will see dominoes fall over the coming months,” said Peter Sand, senior analyst at shipping analytics firm Zeneta, warning that the standoff could also lead to higher shipping costs more broadly.

He added that this would hurt consumers and businesses that tend to rely on so-called “just-in-time” supply chains for goods.

This confrontation exacerbates uncertainty in the US economy at a sensitive time.

The economy has been slower and the unemployment rate has been rising with the US election approaching in six weeks.

A strike risks putting President Biden in a difficult position.

US presidents can intervene in labor disputes that threaten national security or safety by imposing an 80-day cooling-off period, forcing workers to return to their jobs while negotiations continue.

In 2002, Republican President George W. Bush intervened to open the ports after an 11-day strike by port workers on the West Coast.

A US Chamber of Commerce business group called on President Biden to take action.

“Americans have endured the pain of delays and shortages of goods during the pandemic-era supply chain backlog in 2021,” said Susan B. Clark, President and CEO. “It would be unconscionable to allow a contract dispute to cause such a shock to our economy.” Business Group Executive.

The ILA’s Mr. Daggett endorsed the Democratic Biden in 2020, but has criticized the president more recently, citing pressure on West Coast dockworkers to reach a deal a year ago. He met with Donald Trump in July.

Although any strike chaos would likely hurt Democrats, the cost of alienating allies in the labor movement a few weeks before the election would be greater, said William Brocher, a professor of labor studies and labor relations at Rutgers University.

But public support for strikes could be tested by the conflict, which Daggett championed. Who was acquitted For having ties to organized crime in a 2004 case by federal prosecutors. The related civil lawsuit remains unresolved.

Films such as the 1954 classic On the Waterfront once defined the image of the dockers’ union, but Professor Brocher said he believed historical memory had largely faded, and that many people shared dockers’ concerns about the cost of living and automation.

“As much as this could influence public opinion against the ILA, the ILA members’ strike is their decision and I don’t think they will be swayed by public opinion in any meaningful way,” he said.

“What is more likely to happen is that strike pressure will likely force employers to come back to the table with a much larger offer.”