Why 45,000 dock workers are on strike

Workers at ports on the East and Gulf Coasts went on strike Tuesday after negotiations broke down between the union that represents them, the International Longshoremen's Association (ILA), and the organization of international shipping companies that employ them.

About 45,000 workers walked off work at 12:01 a.m., marking the union's most significant strike since 1977. On Tuesday, workers at 36 different ports walked off the job after their six-year contract with the United States Maritime Alliance (USMX) expired — and depending on how long the work stoppage lasts, it could have a huge impact on the U.S. economy.

The strike affects some of the country's largest ports, such as the Port Authority of New York and New Jersey. Overall, the affected ports handle around 50 percent of imports and exports to the USA. Although some of this cargo was preemptively diverted to the West Coast, this is not a solution without complications.

In recent days, it appeared as if USMX and ILA were moving forward with negotiations, with USMX requesting an extension to the current contract to gain more negotiating time. However, the ILA rejected the new proposal.

ILA President Harold Daggett warned Tuesday that the union is “prepared to fight as long as necessary, to stay away from the strike for as long as necessary, to get the wages and anti-automation protections our ILA members deserve.”

The ILA represents the approximately 45,000 workers who unload huge freight containers from large cargo ships. Eventually, the ships' stocks end up in warehouses, shelves and factories. Members work in ports along the East Coast as far north as Maine, as well as Gulf Coast ports in Louisiana and Texas.

“There is a strike over two main issues,” said Art Wheaton, director of labor studies at Cornell University School of Industrial and Labor Relations. “One thing is money. Two is technology.”

The union has called for a significant wage increase for longshoremen over the six-year contract period, as well as higher contributions to their pension schemes and a say in the role of automation in their industry. According to some reports, the union demanded a wage increase of up to 77 percent; USMX's most recent proposal called for a 50 percent increase over the life of the contract.

“The biggest concern is that longshoremen don’t want automated machines to be responsible for automatically picking up, dropping off and releasing cargo,” Wheaton said. “They want to have a human operator there” to ensure the quality and safety of their operations – and job security.

Negotiations between USMX and ILA for a new contract halted in June, reportedly over the use of automation at a port in Mobile, Alabama. USMX filed a complaint with the National Labor Review Board last week, alleging that the ILA refused to continue contract negotiations. USMX did not respond to Vox's request for comment.

The shipping companies that make up USMX, all of which are based abroad, have made billions as global trade and shipping boomed, the union argues, while workers' wages have stagnated amid inflation.

Longshoremen earn about $55 per hour on the West Coast, while experienced workers on the East and Gulf Coasts earn an average of $39 per hour. West Coast longshoremen received an impressive wage increase in their latest contract; They belong to another union, the International Longshoremen and Warehouse Union (ILWU), which has long been much more radical than the ILA in its policies, demands and tactics, according to Gabe Winant, a labor historian at the University of Chicago.

But ILWU workers' big wage gains proved that it was possible to demand more – and get it.

Now the ILA is hoping for a similar victory.

More than 50 percent of all goods imported into the United States on container ships come through ports on the East and Gulf Coasts, and nearly 70 percent of container exports leave them. In the short term, there are unlikely to be any shortages or price increases for most consumer goods; Many companies have prepared for the strike. But depending on how long the strike lasts, some perishable items could be more expensive or harder to obtain.

“We have all these perishable goods being imported to the East Coast,” like blueberries, bananas and fish from South America, Chris Tang, a supply chain management professor at UCLA, told Vox. “We also import clothing, toys and electronics across the East Coast.”

The automotive industry is also likely to be affected, as many cars and car parts are imported from Europe. “There is still some inventory in the automobile manufacturing industry and also at car dealers, so this won't have much of an impact in the short term,” Tang said. But if the strike lasts for weeks, inventory will run out and car repairs could become more difficult as parts deliveries are delayed .

In addition to the strike, there are other factors currently impacting global shipping, including Houthi attacks in the Red Sea, which have paralyzed shipping since November last year, as well as extreme weather conditions. The Panama Canal was also independently affected by the strikes; The waterway is suffering from a drought that has led to a backlog of shipping there.

“Anyone who has tried to buy toilet paper during the pandemic can tell you that we have a tricky supply chain, and when you start messing with the freight ships, the rail and the tractor-trailers, you're a slam dunk,” Wheaton said . “You just won’t be able to move anything. In addition, a large part of the east coast has just been submerged under water due to the hurricane that just passed through.”

Overall, consumers shouldn't be too worried about goods becoming scarce. For now, Tang warns people not to hoard products for fear they might go missing from U.S. shelves; Regardless of the strike, this will lead to shortages and drive up prices.

What happens with the strike largely depends on how quickly the ILA and USMX can come to an agreement.

Federal law gives Congress and the president the authority to break strikes under certain circumstances. In that case, President Joe Biden could send the longshoremen back to ports for 80 days while USMX and the ILA continue contract negotiations under the authority granted by the Taft-Hartley Act, but he does not want to do that.

Tang warns that this could change the longer the strike lasts, as it could last until the presidential election.

The government will face “pressure from consumers, retailers, manufacturers and also shipping companies” to take action and reopen ports, Tang said. Some business groups are already calling on Biden to put ILA members back to work send. But Biden has also largely supported union action, with the exception of the 2022 railroad workers' strike, and a number of unions are supporting Vice President Harris' campaign.

“I think President Biden is under a lot of pressure right now,” Tang said.

Ideally, the government will not need to act as ILA and USMX reach an agreement either alone or with the support of US officials in negotiations.

“The government's official policy for more than 100 years has been that the best solution is a negotiated settlement,” Wheaton said. “The union isn’t going to get everything they want, management isn’t going to get everything they want, but you sit at the negotiating table and see what both sides can live with.”