How would a port strike along the East Coast affect the US economy?

For the first time in decades, port workers along the East Coast are threatening to strike. If an agreement is not reached, a strike could begin on October 1, impacting ports along the Gulf and East Coast. The work stoppage could affect half of all goods imported and exported to the United States, with around 45,000 people taking part in it.

On Thursday, September 26, the United States Maritime Alliance (USMX), representing the companies operating and using US ports, filed an Unfair Labor Practice charge with the National Labor Relations Board to force union negotiators back to the table. The International Longshoremen’s Association (ILA), the union representing the port workers, labeled the move by the USMX a “publicity stunt” that attempts “to fool the American public that they care for the longshore workers who help earn them billions of dollars and are serious about negotiating a new Master Contract Agreement.”

The economic impact of the strike

The economic consequences of a strike would be severe, underscoring the critical work these port workers do in maintaining the integrity of supply chains. ABC News reported that a strike could cost the US economy around $4.5 billion a day. A short-term strike would likely cause some supply chain disruptions, but it is a long-term strike that government officials and business owners worry about. Shortages as containers build up in US ports could lead prices to rise.

The union accuses USMX of waiting until the last possible moment to strike a deal, knowing that the Biden administration can intervene to block the strike if an agreement is not reached, thanks to the 1947 anti-worker Taft-Hartly law. In recent days, many business associations representing companies whose products would be trapped in US ports have called on the White House to intervene in the strike, as many stand to lose if one occurs.

The AFL-CIO, of which the ILA is a member, wrote to Congress rejecting calls for the White House to intervene in the strike. The letter cites how employers have historically used federal powers to negotiate in bad faith because they know strikes will create political challenges that many leaders will seek to avoid.

The AFL-CIO’s letter points to the weaknesses in the Taft-Hartly Act that limit the power of workers to demand that they share in the profits their labor generates. Additionally, labor leaders have highlighted how workers like those represented by the ILA are too critical to the national security of the country to be able to advocate for better pay and conditions. If these workers threaten to strike, that act can have such a devastating impact on the economy that their rights can be stripped by the federal government. And in that case, how is it that they should be able to advocate for better pay and conditions? The union and its allies within the labor movement argue that if the country depends so deeply on the work of ILA’s members, then the conditions of their labor should be dignified and reflective of their contribution to society.

Negotiations stall as ILA rejects USMX offer on wage increases

The union feels that now that time is running out, USMX wants to force a deal through. “USMX should have brought charges against their members who were unprepared for exploratory Master Contract talks with the ILA when the two sides first met over two years ago,” argued the ILA in a press release put out over the NLRB filing was made against their organization.

The ILA walked away from the negotiations after the USMX continued to offer a wage increase package that the union had rejected. The USMX is now trying to force the union back to the table, unwilling to alter its stance. ILA President Howard Dagget accused USMX of attempting to ‘deceive’ the public by publishing “misleading calculations” on the impacts of the wage increases offered to workers over the next six-year contract. “Even a $5.00 an hour increase in wages for each year of a six-year agreement only amounts to an average annual increase of approximately 9.98 percent,” the union’s president emphasized.