US ports are closing as workers strike

Tens of thousands of dock workers have gone on indefinite strike at ports across the US, threatening major trade and economic disruption ahead of the presidential election and the busy holiday shopping season.

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

The move marks the first such closure in nearly 50 years.

President Joe Biden has the power to suspend the strike for 80 days to allow negotiations to continue, but the White House has said it does not plan to take action.

The two sides are vying for a six-year contract covering around 25,000 port workers employed in container and roll-on/roll-off operations, according to the US Maritime Alliance, known as USMX, which represents shipping firms, port associations and port operators.

Negotiations have been stalled for months and the existing contract between the parties expired on Monday.

Union boss Harold Daggett has called for a big pay rise for his members, while expressing concern about threats from automation.

USMX accused the union of refusing to negotiate, and filed a complaint with labor regulators asking them to order the union to the table.

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

Mr. Daggett you have shown the union wants to see hourly wages increase by five dollars a year over the life of the six-year deal, which it estimates is about 10% a year.

The ILA said workers are being owed money after the shipping company’s profits rose during the Covid crisis, while inflation is affecting wages. It has warned that it expects a general strike by its members, including those not directly involved in the conflict, although the numbers are not clear.

The union said it represents more than 85,000 people; it has about 47,000 active members its annual report to the Ministry of Labour.

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

The ports involved handle about 14% of agricultural exports and more than half of all exports, including a significant portion of the banana and chocolate trade, according to the Farm Bureau.

Other sectors facing disruption include tin, tobacco and nicotine, Oxford Economics said. Clothing and shoe companies, as well as European car manufacturers, which move most of their shipments through the Port of Baltimore, will also benefit.

US imports surged over the summer, as many businesses took steps to speed up shipments ahead of the strike.

“I don’t think we’re going to see immediate, significant economic impacts…but over the course of weeks, if the strike lasts that long, we could start to see prices go up and supply shortages,” it said. Seth Harris, a professor at Northeastern University and a former White House adviser on human resources.

More than a third of exports and imports could be affected by the strike, costing US economic growth at least $4.5bn each week of the strike, according to Grace Zemmer, a US economist at Oxford Economics, though others estimate. the economic impact can be high.

He said there are more than 100,000 people who may find themselves without work temporarily as the impact of the suspension of work spreads.

“This is a starting event, which will see the heads fall in the coming months,” said Peter Sand, senior analyst at shipping company Xeneta, warning that the suspension could also increase shipping costs.

That will affect consumers and businesses that often rely on so-called “lead times” for goods, he added.

The stand-off adds uncertainty to the US economy at a critical time.

The economy has been slowing and the unemployment rate is rising as the US election approaches in six weeks.

The strike risks putting President Biden in a tricky position.

US presidents can intervene in labor disputes that threaten national security or safety by imposing an 80-day cooling-off period, forcing workers to return to work while negotiations are ongoing.

In 2002, Republican President George W Bush intervened to reopen the ports after an 11-day strike by West Coast shipping workers.

The American Chamber of Commerce business group has urged President Biden to take action.

“The American people have experienced the pain of delays and shortages during the pre-pandemic crisis of 2021. It would be reckless to let a contract dispute derail our economy,” said Suzanne P. Clark, president and CEO. business group manager.

The ILA’s Mr Daggett has endorsed Democrat Biden in 2020, but has criticized the president recently, putting pressure on West Coast dock workers to reach an agreement last year. He met with Donald Trump in July.

While any upheaval in the strikes could hurt Democrats, the cost of alienating allies in the labor movement in the weeks before the election will be significant, said William Brucher, a professor of labor studies and employment relations at Rutgers University.

But public support for the strikes could be tested by the controversy, fueled by Mr Daggett, who is released for having links to organized crime in a 2004 case by federal prosecutors. A related court claim has not been resolved.

Films such as the 1954 classic On the Waterfront once defined the image of the shipping union, but Prof Brucher said he thought the historical memory had faded and many people shared the concerns of shipping workers about the cost of living and automation.

“Although it may affect public opinion about ILA, the strike by ILA members is their decision and I do not see that they will be affected by public opinion in any meaningful way,” he said.

“What is likely to happen is that the pressure of the strike will force employers to come back to the table with a much bigger offer.”