Strike threatens to close major U.S. ports

The longshoremen’s strike has caused the indefinite closure of most U.S. ports and threatens to cause significant disruption to trade and the economy ahead of the presidential election and the busy holiday shopping season.

Tens of thousands of members of the International Longshoremen’s Association (ILA) set sail Tuesday at 14 major ports along the East Coast and Gulf Coast, preparing to halt container shipping from Maine to Texas.

Barring some last-minute intervention, the move would be the first 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 said he has no plans to take action.

The two countries serve about 25,000 longshoremen working in container and roll-on/roll-off operations, according to the United States Maritime Union (USMX), which represents shipping lines, port associations, and port associations.6 They are fighting over a basic yearly contract. Marine terminal operator.

Negotiations have been stalled for months, and the current contract between the parties expires on Monday.

Union president Harold Daggett has expressed concern about the threat posed by automation, while demanding significant pay increases for his members.

USMX accused the union of refusing to negotiate and filed a complaint with labor regulators to order the union to return to the bargaining table.

Under previous contracts, starting wages ranged from $20 to $39 an hour, depending on the worker’s experience. Workers also receive other benefits, such as bonuses related to container trade.

Daggett has indicated the union wants an annual increase of $5 per hour over the six-year term of the contract, which he estimates would amount to about 10% annually.

The ILA said workers were in debt as shipping companies’ profits soared during the coronavirus pandemic while inflation hit salaries. The group has warned that more strikes are expected in its member countries, including by members not directly involved in the conflict, although the exact number is unknown.

The union said it represents more than 85,000 people. In its annual report to the Department of Labor, it claimed to have approximately 47,000 active members.

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

The ports involved handle about 14% of agricultural exports and more than half of imports by sea, including a significant portion of the banana and chocolate trade, according to the Agriculture Department.

Other sectors exposed to disruption include tin, tobacco and nicotine, according to Oxford Economics. Clothing and footwear companies that ship much of their cargo through the Port of Baltimore, as well as European automakers, will also be hit.

U.S. imports soared over the summer as many companies took steps to expedite shipments ahead of the strike.

“We don’t expect to see any significant economic impact right away… but if the strike lasts that long, prices could rise and there could be shortages in the coming weeks.” said Seth Harris, a professor at Northeastern University and former White House labor adviser.

More than a third of imports and exports could be affected by the strike, which would hit U.S. economic growth by at least $4.5 billion each week during the strike, said Grace Zemmer, associate U.S. economist at Oxford Economics. It is said that there is a possibility. The economic damage could be even greater.

He said more than 100,000 people could be temporarily out of work if the shutdown spreads.

“This is really the triggering event that will cause dominoes to fall over the coming months,” said Peter Sand, principal analyst at ocean freight analysis firm Zeneta, adding that the standoff could push up broader shipping costs. He warned that there is also a sexual nature.

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

This conflict is creating uncertainty for the U.S. economy at a sensitive time.

With the US presidential election just six weeks away, the economy is slowing and the unemployment rate continues to rise.

This latest attack risks putting President Biden in a difficult position.

The president of the United States can intervene in labor disputes that threaten national security or safety with an 80-day cooling-off period and force workers to return to work while negotiations continue.

In 2002, Republican President George W. Bush intervened and opened the port after an 11-day strike by longshoremen on the West Coast.

The U.S. Chamber of Commerce, a business group, called on President Biden to take action.

“Due to pandemic-era supply chain disruptions in 2021, Americans experienced the pain of delays and shortages of goods. It is unconscionable to allow contract disputes to have such a traumatic impact on our economy.” said Suzanne P. Clark, president and chief. Executive of business group.

ILA’s Daggett supported Democrat Biden in 2020, but recently criticized the president for pressuring West Coast longshoremen to reach a deal a year ago. He met with Donald Trump in July.

William Blucher, a professor of labor studies and employment relations at Rutgers University, said the disruption of the strike is likely to hurt Democrats, but the cost of alienating allies in the labor movement in the weeks before the election could be even greater. He said it would get bigger.

But the controversy, championed by Mr. Daggett, who was acquitted of organized crime ties in a 2004 federal case, could test public support for the strike. Related civil litigation remains unresolved.

Although films such as the 1954 classic The Waterfront once defined the image of longshoremen’s unions, Professor Blucher says that historical memory has largely faded and that many people are no longer aware of longshoremen’s concerns about cost of living and automation. He said he believes they are shared.

“While it may sway public opinion against the ILA, a strike by ILA member states is their decision and I don’t think they will be influenced by public opinion in any meaningful way,” he said.

“What is more likely to happen is that the pressure of a strike will likely cause employers to come back to the table with more substantial offers.”