First shutdown in 50 years due to a US ports strike

First shutdown in 50 years due to a US ports strike

Ahead of the presidential election and the hectic holiday shopping season, tens of thousands of dockworkers have embarked on an indefinite walkout at ports throughout the majority of the United States, posing a serious threat to trade and the economy.

Members of the International Longshoremen’s Association (ILA) walked out on Tuesday at 14 major ports along the east and gulf coasts, blocking container movement from Maine to Texas.

This is the first shutdown of its kind in nearly First shutdown in 50.

Although the White House has stated that President Joe Biden does not intend to act, he is able to suspend the strike for an additional 80 days in order to conduct further negotiations.

What is the purpose of the strike?

The parties’ current contract expired on Monday, and negotiations had been at a standstill for some months.

According to the White House, Vice President Kamala Harris and President Biden were keeping a careful eye on the First shutdown in 50.

“The President has instructed his staff to personally inform both parties of the need for them to promptly and fairly come to the bargaining table.”

The dispute between the two parties is over a master contract that spans six years and employs over 25,000 port workers for roll-on/roll-off and container operations. US Maritime Alliance, or USMX, is a trade association that comprises maritime terminal operators, port associations, and shipping companies.

USMX announced on Monday that it has raised its offer, which would improve health care alternatives, boost employers’ payments to pension schemes, and increase earnings by about 50%.

While expressing concerns about the challenges posed by automation, union leader Harold Daggett has asked for major salary increases for his members.

In a complaint to labor regulators, USMX claimed that the union was not willing to engage in negotiations and requested that they force the union to return to the bargaining table.

Starting pay under the prior agreement varied based on experience, from $20 to $39 per hour. Other advantages, such bonuses related to the container trade, are also provided to workers.

Mr Daggett has suggested the union wants to see per-hour compensation increase by five dollars per year throughout the course of the six-year pact, which he said amounted to around 10% each year.

In light of the fact that wages were negatively impacted by inflation during the Covid epidemic, the ILA claimed that workers are entitled to compensation. Though the precise number is unknown, it has issued a warning to expect a wider strike by its members, including those not directly involved in this dispute.

According to the union, it represents over 85,000 individuals; in its Labor Department annual report, it stated that it had over 47,000 active members.

Which goods are going to be impacted by the strike?

Food and other imports that must be received quickly are probably going to be among the first to suffer.

The Farm Bureau estimates that the ports in question handle over half of all imports and around 14% of seaborne agricultural exports, which includes a sizeable portion of commerce in bananas and chocolate.

According to Oxford Economics, other industries at risk of upheaval include tin, tobacco, and nicotine. Businesses that sell apparel and shoes as well as European automakers who export a lot of their goods via the Port of Baltimore would suffer.

Over the summer, US imports increased dramatically as several companies rushed shipments in anticipation of the strike.

Professor Seth Harris of Northeastern University and former White House labor adviser said, “I do not think we will see immediate, significant economic impacts…but over the course of weeks, if the strike lasts that long, we can begin to see prices rise and for there to be some shortages in goods.”

What effect will it have on the economy?

According to Grace Zemmer, an associate US economist at Oxford Economics, the strike may impact more than a third of exports and imports, hurting US economic growth by at least $4.5 billion every week of the strike. Other estimates suggest the economic damage might be even greater.

More than 100,000 workers, she claimed, might experience a brief loss of employment as the effects of the suspension spread.

According to Peter Sand, chief analyst at maritime freight analytics company Xeneta, “this is really a trigger event, one that will see dominoes fall over the next months.” Sand also warned that the standoff may increase shipping costs more broadly.

He said that would hurt customers and companies that often depend on so-called “just-in-time” supply networks for goods.

What impact might this have on the US election?

The ILA is on strike for the first time since 1977 during this standoff, which throws uncertainty into an already fragile US economy.

With the US election coming up in six weeks, the economy has slowed and the unemployment rate is rising.

The walkout could place President Biden in a precarious situation.

US presidents have the authority to impose an 80-day cooling-off period, which forces employees back to work while talks are ongoing, in labor disputes that pose a threat to national security or safety.

A different union represents the dockworkers on the west coast, and they went on strike for 11 days before Republican President George W. Bush intervened to open ports in 2002.

President Biden has been urged to act by the US Chamber of Commerce, a business organization.

“In2021, during the pandemic-era supply chain backlogs, Americans suffered from delays and shortages of products. “To let a contract disagreement cause such a shock to our economy would be immoral,” stated Suzanne P. Clark, the business group’s president and chief executive.

Mr. Daggett of the ILA supported Democratic candidate Joe Biden in 2020, but he has since criticized the president, pointing to the pressure put on west coast dockworkers to come to an agreement a year ago. Trump and he had a meeting last year.

According to William Brucher, a professor of labor studies and employment relations at Rutgers University, losing allies in the labor movement just weeks before the election would come at a bigger cost, even though any strike turmoil is likely to affect Democrats.

However, the conflict, which has been supported by Mr. Daggett, who was cleared by federal prosecutors in 2004 of any involvement with organized crime, may put the public’s support for strikes to the test. Unresolved is a similar civil matter.

Films such as the 1954 classic crime thriller On the Waterfront, starring Marlon Brando, historically defined the union’s image, but Prof Brucher said he thought that historical memory had mostly faded and many people shared the dockworkers’ concerns about cost-of living and automation.

He remarked, “A strike by ILA members is their decision and I do not think they will be affected by public opinion in any meaningful way, as much as it could sway public opinion against the ILA.”

“A strike-related pressure that would probably bring the employers back to the table with a lot more substantial offer is more likely to occur.”