The union threatens a strike on September 30. If that happens, it could change the election.
Election Wild Card
The Wall Street Journal comments On the Waterfront, an Election Wild Card
Dockworkers say they’ll strike on Sept. 30 if no new contract is in place, potentially halting activity at ports from Maine to Texas that collectively handle more than 60% of total U.S. container volume. The International Longshoremen’s Association suspended negotiations in June over a technical dispute, and no new talks have been scheduled.
The ILA expressed dissatisfaction after Mr. Biden dispatched acting Labor Secretary Julie Su last year to force a settlement in negotiations involving the ILA’s West Coast counterpart, ending months of disruption at Los Angeles, Long Beach and other ports. The union secured a 32% wage increase over six years.
ILA leaders seem to believe a much higher wage increase is within reach after container lines earned historic profits totalling over $400 billion during the pandemic, according to analyst John McCown. That was more in nominal terms than all the profit the industry earned up to that point, going back to the first container ship launched by Malcom McLean in the 1950s, according to Sea Intelligence.
If a strike were to occur, the Biden administration wouldn’t have the option of forcing longshoremen back to work, despite the president’s legal ability to do so under the Taft-Hartley Act. For Mr. Biden, a lifelong union supporter who claims to be the only president to walk a picket line, reopening the ports forcefully (as President George W. Bush did in 2002) would look like a betrayal of organized labor, a constituency the Democrats will need in November.
The administration’s only option may be to bludgeon the ocean carriers, most of which are foreign-based, into accepting an unfavorable settlement. In prior negotiations, the carriers frequently capitulated to labor’s demands in the interest of keeping ships and cargo moving.
Help Not Wanted
The ILA said it isn’t interested “in any help from outside agencies to interfere in our negotiations. . . . This includes the Biden Administration and the Department of Labor.”
This reminds me of a time when as a kid I was feeding bread to a goose. When I was out of bread, the goose ran up and bit me.
A Political Photo Op
The ILA withheld its endorsement of Mr. Biden—and now Kamala Harris. In 2020, the union waited until March to endorse Mr. Biden. The ILA’s chief negotiator, Harold Daggett, posted a recent photo of his meeting with Donald Trump.
Will Trump march with the picketers?
Here We Go Again
On June 10, CNBC reported Biggest U.S. Ports Union Suspends Labor Talks
The International Longshoremen’s Association, which represents union workers at East Coast and Gulf Coast ports, said Monday that it has suspended talks scheduled for this week with the United States Maritime Alliance as part of ongoing negotiations over a new labor contract.
The ILA said in a release that it canceled the talks with ports management to discuss a new labor deal after discovering that automated technology was being used by APM Terminals and Maersk, the world’s second-largest shipping company and APM Terminals’ parent company, to process trucks at port terminals without union labor. The union says an “auto gate” system was initially identified at the Port of Mobile, Alabama, but the union indicated that it believes the technology is in use at other ports.
“Here we go again! This is another example of USMX members unilaterally circumventing our coast-wide Master Contract. This is a clear violation of our agreement with USMX, and we will not tolerate it any longer,” the union said in its release. “There’s no point trying to negotiate a new agreement with USMX when one of its major companies continues to violate our current agreement with the sole aim of eliminating ILA jobs through automation,” stated ILA president Harold J. Daggett.
The ILA indicated in its release that it will not meet with USMX until the “auto gate” issue is resolved.
Union Seeks Wage Hikes ‘Commensurate’ With USMX Revenues
The Sourcing Journal reported on June 12, East Coast Port Union Wants Wage Hikes ‘Commensurate’ With USMX Revenues
According to the ILA, the “enormous” profits and sales raked in by the United States Maritime Alliance (USMX) has the union demanding wage hikes “commensurate with these revenues.”
The union, which walked away from master contract negotiations for 45,000 dockworkers across 36 ports from Maine to Texas on Monday, has insisted that the members will go on strike if a new deal is not in place by its Sept. 30 expiration date.
“The threat of a coast-wide strike on Oct. 1, 2024, is becoming more likely as USMX and its member companies continue to drag their feet,” said ILA president Harold J. Daggett, in a statement.
In the latest snag in ILA’s contract dispute with the USMX, the union is largely upset with the deployment of an automation project by Maersk in Alabama’s Port of Mobile, as well as an increasing number of non-union IT personnel based in an inland port in Charlotte, N.C.
“Companies like Maersk are repeatedly trying to eliminate ILA jobs with the introduction of automation while raking in billions of dollars,” Daggett said. “They are in for a rude awakening. This is our time, and the ILA will demand our ILA longshore workers get big boosts in their wages.”
And this February, the ILA won litigation that will effectively force the Port of Charleston to employ more unionized dockworkers at a new container-handling terminal.
No Automation Demand
Look at the lead image. Are we to go back to unloading all goods by hand?
Should we not allow cranes when we build homes and apartment?
In Support of Automation
I cheer automation because it lowers the price of goods for everyone.
And it does so at the expense of very few. Restrictions against automation unfairly raise prices.
A similar thing is happening with EVs because EVs have fewer parts and are easier to assemble.
Ironically, it is repetitive strikes and threats of them that eventually forces automation.
I favor a Reagan-style solution. Fire them all as he did with PATCO. This would be harder because these are not public workers.
Expect More Inflation
The threat of a strike has been ongoing since June. The Journal reported there have been no talks since then.
Eventually, this strike will be settled. Expect more inflation when it settles.
Public Unions Have No Business Existing: Even FDR Admitted That
On June 30, 2018, I commented Public Unions Have No Business Existing: Even FDR Admitted That
FDR: All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations.
The ILA is a private union, not a public one. However, a strike of this nature could cripple the US if it lasted long enough.
Whether this is settled before or after a strike, expect more inflation from it. And if there is a strike that lasts more than a few days, it would quickly cripple the economy.
No they’re not… they are just seeking their next raise to cover inflation cost. Unions are supported heavily by the Government, and they keep the Unions very happy, entirely for voting purposes mind you, as they could give a sh#& less about the workers themselves!
“couldn’t”…!
Extend it to the West coast dockworkers and truckers for a real show stopper.
It’s time for enforced labor. Take ALL of the illegal immigrants int detention centers: 1) Off them jobs that pay well on the docks. 2) In exchange, if they sign up, after 24 months, they qualify for citizenship.
[NEVER HAPPEN, but we can dream]
There is a plan to make a rail corridor in Mexico to allow transshipment of goods across southern Mexico to bypass the bottleneck of the Panama Canal. This may eventually be expanded to also allow movement by rail across Mexico and into the USA to bypass expensive American ports. These dockworkers may price themselves out of jobs if they are too greedy.
Why is it the monopoly laws don’t apply to Unions? Private and public unions should be restricted from holding people hostage because they control a market.
EXACTLY. A union is a monopoly on the relation between employees and employers. Employers need to be allowed to chose among many unions for their labor needs. Employees need to be allowed to chose among several unions at an individual company for their employment representation.
The stevedores get envelopes with cash to get the stuff in/out fast.
Automation. Of course it lowers the costs and decreases the number of laborers (high paying wages).
Yet, here again the the Unions demonatrate how to milk this cash cow, 32% more each year for the next six years.
parallelism to the $15 billion high speed rail line in California that took ten years to build… Imagine that, America the Greatest nation in the World and still NO high speed rail.
Thank you Unions.
for high the higher wages and for holding everyone else back……
America had an excellent rail system until the federal Government decided to get in the highway building business.
Very little insight on their part
I think it’s 32% total over six years, not every year….
They just got that big EV boost in workers and pay, but it was before the deal for EV’s went south. So they are set now until the EV craze picks back up, around the time a New Contract will be needed. Hmm.. gotta wonder don’t you?
Let Bezo, Tim Cook and The Waltons unload the ships.
Bezo(s) is spending time in Sicily, according to our Sicilian Friends. Mush was there, too.
Tough talk is a good strategy at this stage and we should expect more to come. But the ILWU
on the West Coast is a different beast than the ILA on the East/Gulf Coast. The main difference is that the ILA does not have all the work on the East Coast and Gulf Coast. Grain terminals in Louisiana are non-ILA. A lot of the bulk ports in Texas are non-ILA. When you get south of Baltimore, the ILA does not have all the work at some container ports, namely Charleston and Savannah where state employees operate the state owned gantry cranes. So it’s a bit more complicated and a bit more nuanced. That said, this is Harold Daggett’s likely last contract before his son takes over. I expect it will be messy. But burning down the house is perhaps not the lasting legacy that you want to leave behind. This will get sorted out by the players involved but no early settlement should be expected. The ILWU recently won a major jurisdictional case at the Port of Charleston. Had that gone the other way and the Port/Employers prevailed, then we would be in a different place altogether. I have faith in both the Union leadership and the USMX members. But remember too, that the Master agreement is just that. Each port area has to ratify it and then reach separate agreements at their specific port area. Yes, it’s very complicated and a lot of moving parts. This will not be settled before the election in my opinion.
Lastly one clarification: the 2002 ILWU strike that was referenced was in fact not a union strike. The employers “locked out” the union and work was suspended. Bush invoked Taft Hartley and the lock out was lifted and negotiations re-started with the union allowed back to work.
It should read…”The ILA (not ILWU) won a major jurisdictional dispute……). Sorry about that.
Good news for mexican ports and mexican drivers. They will get more work.
Here in Australia the dockworkers were the most militant and corrupt of unions. The jobs were VERY well paid and tightly held with retiring workers passing the position down to sons. Then Patrick Stevedores got a bunch of fresh workers, often ex military, and trained them to handle the cranes etc in the UAE.
Those new non union workers were then used to break up the dockworkers power and run the docks more efficiently.
Could something similar happen to your dockworkers? Plenty of highly skilled dockworkers around the world that could be brought in from other ports run by international stevadoring and shipping companies to replace the overpaid US Union dockworkers.
I do not think it would happen in the U.S. The back drop of the Australian situation occurred as more public port authorities essentially privatized through concessions. You had the public entities taking the money and getting out of the way, thus enabling different competitive forces impacting water front union labor.
great example! Aussie dock workers, a forgotten past time.
my trips to Australia were memorable. 1990s, 2000s and 2017. what was evem memorable was taking a rode on one of the retired dock workers boats! impressive wealth accumulation to say the least….. the stories of course of what fell off the boat were also impressive.
OK, now I’m intrigued… what fell off the boat…??
Hmmm, biting the hand that feeds you. Funny.
Enough is enough with greedy stevedores. Let the Adani group (India) compete with Shanghai International Port Group for the rights to operate those ports.
With provision for docking Chineses subs and aircraft carriers.
“I cheer automation because it lowers the price of goods for everyone.”
It seems to me that automation is the natural progression of things. There’s no stopping it. Some will try to slow it down to keep thier job or increase thier wage. Whether such efforts are moral or not depends on one’s perspective (I don’t believe that a universal morality exists). They may succeed in the short run but eventually thier job will be eliminated. Such is the dance between competing interests.
Good luck with that.
Automation does nothing to lower the price of goods. Producers will charge what the market will bear, regardless of the cost.
Automation, in the short term, lowers production costs. But in the long run, it reduces Aggregate Demand. In our Consumer Economy, with about 70% of GDP being consumer spending, answer me this:
Q: From where do Consumers get the money to purchase goods & services?
A: Primarily from selling their Labor.
For decades, during the New Deal, the U.S. was a high-wage, low-price consumer economy, with millions of small businesses, and very few large corporations.
With so many Americans feeling well-compensated for what they do, and feeling like their futures were reasonably bright & secure, most Americans had disposable income, and spent freely.
Also, the Sherman Anti-Trust Act was vigorously enforced to ensure plenty of competition among a multitude of competing producers.
FDR’s New Deal policies created the most prosperous Middle Class in world history. The U.S. was the world’s leading manufacturer and creditor. We were the economic model that much of the rest of the world followed for decades.
In other words, FDR’s New Deal policies Made America Great [for white men].
It was Reagan, the GOP, and a bunch of corporate Dems who decided to abandon the Keynes demand-driven economy, and go with Milton Friedman’s Capital hegemony, open borders, and a 44-year War on Workers.
When we had millions of wealthy Workers, producers invested in developing products that those Workers would buy.
Today’s producers don’t invest in production, because there aren’t sufficient markets to support it. Instead, they buy back their shares, or invest in automation to reduce their production costs.
Now we’re reached the point where the vast majority of U.S. Workers, and Workers throughout the world, can’t afford to purchase the goods & services that they produce.
The corporate geniuses & policymakers in the U.S. decided that instead of investing in American Workers, their Education, their Health Care, and their productivity, they would invest in China’s. And after making those investments for the last couple decades, now they see China as a threat. What on Earth were they expecting? Now we’re desperately looking for a military “solution” in the Pacific Rim because China & Russia made better investments than we did, and they’re passing us by.
To the dumb asses who thought that oligarchs were the best people to control economic policy, I have one piece of advice: “If it ain’t broke, don’t fix it.”
“Automation, in the short term, lowers production costs. But in the long run, it reduces Aggregate Demand.”
What total bullshit
When prices go down standards of living go up. Everything that government touches: health care, education, public unions, “affordable housing” etc., drives up prices.
Automation coupled with competition lowers prices (or would without the Fed and government policies and regulations that hand in hand destroy the dollar)
Heitz is surely a troll spouting misinformation. Maybe a Russian bot?
“For decades, during the New Deal, the U.S. was a high-wage, low-price consumer economy,”
This is crazy. Wages dropped 42% during the new deal. The new deal presided over the great depression. Next time, check your facts.
Here we go again. Blame the workers for inflation when they are only trying to keep even with inflation.
“The union secured a 32% wage increase over six years.” I would like to know what their pay was pre-pandemic and how much that contract actually keeps up with the inflation of the last 4 years in addition to the projected inflation over the next 6 years. I’m betting it doesn’t.
I did that analysis with the UPS contract and it turns out those “huge raises” the drivers got did NOT keep up with inflation. Meanwhile, UPS raised it’s shipping rates a higher percentage than it gave with those “huge raises”.
Exactly. Corporate profits never get blamed. The actual solution is to mandate companies and private unions share a percentage the profits. This would largely resolve many things and make the system based on profits for everyone. Companies refuse to share profits with employees in some industries and this is why these industries are so union heavy. It works in other industries and actually diminishes union power. Let the union deal with how profits are distributed to its members.
I hear the left complaining about greedy corporations as the cause of all evil in the world all the time. I ask them if these corporations were benevolent under Trump and greedy under Biden and, if so, why did they switch. Crickets. I grew up in Pittsburgh PA so I’ve seen unions team up with bad management to ruin cities … why not just elevate it to the country. As for the 32% raise, most of these union contracts have COLA built into them, so this is likely just 32% more after adjusting for inflation. My cousins worked for a state union all their lives. He retired at age 48 and will be paid far more in retirement than during his year … she retired at 51 and will also be paid far more in retirement than in his career. This is why taxes have to be so high. You can believe in benevolent unions and greedy corporations … or you can look at reality. Your choice.
Unions would only distribute based on seniority. That’s the ONLY way they work.
Profit sharing requires a non-unionized workforce so that those who are doing the work and are the best workers benefit the most in profit sharing.
There is a very nice example of this in Hamilton, Ontario. In that city there are 2 steel companies, Stelco which is unionized and Dofasco which is not. For decades the steel workers have attempted to unionize Dofasco but failed. Dofasco keeps competitive wages with Stelco and has profit sharing. As a result it’s consistently one of Canada’s top companies to work for.
“The actual solution is to mandate companies and private unions share a percentage the profits.”
Which is exactly what happens near automatically; once you have sound, non inflationary money: “Companies” cannot hide behind debasement, but is instead forced to either be explicit about a)cutting nominal pay in line with economic growth/price-drops, b)go out of business trying to pay the same number of gold ounces every year, or c)come up with some more sustainable, by definition involving profitability, formula for calculating salaries.
As opposed to what is the case in debasement funded financialized dystopias; where no matter how big a salary increase those further from The Fed’s immediate social circle gets; The Fed will simply wipe it all out and then some. By arbitrarily ramping up the pace of debasement theft to a level even higher, and handing the proceeds; in the form of so-called “asset appreciation”; to the Fed-orbiting leeching classes.
And yet: Almost all those who like to fancy themselves “champions of the workers ” and such; still keeps falling for the trivially obvious nonsense that arbitrary printing, by banksters for banksters; rather than a form of money which connected banksters have NO built in advantage at obtaining vis a vis workers, is somehow “evilcapitalistic” or some such nonsense. All because some economically illiterate, self promoting sophistic “icon,” once babbled some trivially obvious abject nonsense about a “cross of Gold”; which made no sense then,and even less sense today.
You are suggesting MORE regulatory efforts, when a FREE MARKET CAPITALIST structure, over the long run – – and admittedly we cannot know how long – – Capitalism without Government constraints is far better than the other way around.
If the companies and unions are mandated to share profits, do you propose that workers must also accept a wage cut when the company makes a loss…?
If the workers wanted to share the profits, there is nothing stopping them from buying shares in the company….
If I recall, I’ve seen average wages of $170k for dock workers and UPS drivers. If true, they are already vastly overpaid.
How is this ‘overpaid?’
The $170K is a gross exaggeration. The actual hourly rate for UPS drivers is in the range of $35-$40 an hour. 95% of the general public would physically not be able to keep up with the workload expected of those drivers. They earn every penny.
UPS Full-time delivery drivers
Full-time delivery drivers earn an average total compensation package of $145,000 per year, which includes $0 healthcare premiums, up to seven weeks of paid vacation, plus an average of 18 days off for holidays, sick leave and option days. UPS also contributes to a defined-benefit pension plan for each employee.
https://about.ups.com/us/en/newsroom/negotiations/negotiations-basics/working-at-ups.html
The current ‘top rate’ for drivers is $36 but let’s use $40 as the wage. $40x40hrsx52weeks=$83,200. Regardless of how much holiday, sick or vacation they get, their yearly pay is $83,200. The value of the health plan is about $22,000. Is the pension worth $40,000? Doubt it.
Not sure where they come up with the $145K, but I don’t doubt they’re counting average overtime plus matching social security contributions plus workman’s comp value plus every other ‘benefit’ they can use to get the figure up to $145K. It’s the wage that puts the food on the table.
The employer looks at the total cost of employment, $145k is $145k whether all “benefits” or all “wages.” So it may not be $170k for UPS drivers, but I bet it is more than that for dock workers.
And if they earn every penny, why do they have a closed shop? Why not let other prospective employees compete for those jobs?
Because they are overpaid relative to wages they would get in the free market. And don’t tell me the “free market” or what little we have of it isn’t “fair.” Every employer is competing with every other employer for good, quality employees. That is how the price of labor increased by a factor of 30 in Hong Kong from 1950 through the mid’80s, while the price of labor on the Mainland was completely stagnant.
Indeed they are
Dr. Shedlock, please explain why less automation and more focus on using humans to do meaningful work is a bad idea.
Ever looked under the hood of a car make in the 70s or earlier? There is an enormous amount of ‘space’ in there and if you look even closer you’ll see wooden shims holding bumpers and other parts together because they don’t fit perfectly.
The reason is that humans literally built and assembled everything by hand in those days. Human beings can only make tolerances ‘so fine’ because that’s the limit of humanity. Machines can do the same at micrometer and nanometer levels of tolerance. That’s why cars today are much more compact under the hood and they last a lot longer because the precision is orders of magnitude better.
Machines simply do repetitive things MUCH better than humans do and they do them without tiring (lots of mistakes and injuries occur late in the day when a person is worn down from a long shift).
Gapping plugs with a matchbook cover, adjusting timing by ear – but in the end it was the road salt which did them in.
Move a 40 ton container of goods from LA to NY on foot; and you just about may figure it out yourself……
I worked at a unionized steel mill in my younger days where any attempt at automation was met with fierce resistance to “save our jobs.” Fast forward to today and the mill is closed as foreign manufacturers are much more efficient.
Longshoreman strikes are a good argument to reshore manufacturing from China and Europe.
Or open more ports in Mexico and truck the goods across the border…
From China and Europe where they know how to manufacture something.To America,where they don’t. Now ain’t that brilliant!
I suppose the Egyptians could similarly reshore computer manufacturing as well….
JFK signed EO 10988 allowing public sector unions.
Joe says he coulda been somebody. He coulda been a contender in this election. But look at him now, he’s just a bum. Historic wage increases into the jaws of recession. Perfect.
I quote Brando frequently when I talk of my high school wrestling career. I tell people that at the peek of my career, I was just short of mediocre. So I tell people … “I could have been a mediocre.”