A massive labor strike involving 45,000 workers at 30 shipping ports on the East Coast and Gulf Coast went into effect late Monday, with an extended stoppage that could have global repercussions and increase U.S. inflation. may rekindle.
Members of the International Longshoremen’s Association have so far been unable to reach an agreement on wages and protections against automation in the industry in negotiations with the American Maritime Alliance, which represents ports. Union leaders say shipping companies have raked in billions of dollars in profits during the pandemic as freight rates have soared amid disruptions to global supply chains and worker wage increases have been modest. said.
“Now we want them to pay us back,” local ILA president Boise Butler told The Associated Press. “They’ll pay you back.”
Months of preparation leading up to Tuesday’s labor action allowed many U.S. companies to plan for a potential outage by increasing orders before port operations stopped.
Impact on holiday shopping
The timing has raised questions about the potential impact on the upcoming winter holiday shopping season, a key revenue cycle for a wide range of U.S. businesses. But CNN reports that typically retailers have already received about 70% of their holiday inventory by this time, and thanks to early indications from the ILA that a strike may be underway, this year The number is said to be even higher.
But while the U.S. holiday season has been largely spared from strike-related impacts, if the shutdown extends into the coming weeks, it could have a serious impact domestically and globally.
The ports affected by the strike, stretching from Maine to Texas, were selling a wide variety of goods, including bananas and other agricultural products, European beer, wine, and liquor, as well as furniture, clothing, household goods, and European automobiles. deals with goods. According to CNN, these ports also handle imported parts needed to keep U.S. factories open and factory workers employed, among many other goods.
“The most important thing here is that time period amplifies the impact,” Lisa DeKnight, managing director of national industry research at Newmark, told CNBC’s “The Exchange” on Monday. .
“Even if this strike continues for a few days, I think the impact will be fairly short-lived. If this situation continues, it will have a cascading effect not only on the U.S. economy, but on the entire global economy. “Unpredictability is real and has a scale that will wreak havoc on global supply chains,” she added.
Presidential intervention?
Matthew Shea, president and CEO of the National Retail Federation, urges President Joe Biden to use executive authority to intervene with business closures to protect U.S. businesses and their workers. Ta.
“NRF urges President Biden to use all available authorities and tools, including the use of the Taft-Hartley Act, to immediately restore operations at all affected container ports and bring the parties back to the negotiating table. , we ask that there be no further confusion,” Hsieh said in a statement posted by the NRF on Tuesday. “A disruption of this magnitude at a critical time in our nation’s economic recovery would have a devastating impact on American workers, their families, and communities. This attack will bring further hardship to American families after runaway inflationary pressures and in the midst of recovery from Hurricane Helen.
Biden told reporters on Sunday that he had no plans to intervene in the ILA attack.
“This is collective bargaining,” Biden said, according to CNBC. “I don’t believe in Taft Hartley.”
Under powers granted by the Taft-Hartley Act, also known as the Labor Relations Act of 1947, the president can intervene in labor disputes that threaten national security by imposing an 80-day cooling-off period.
