Five things to know about the port strike

Dockworkers and longshoremen in east coast ports are now on strike in a major labor action with real consequences for the U.S. and international economy.

Thousands of members of the International Longshoremen’s Association (ILA) stopped working Tuesday, striking for a substantial compensation increase and protections from automation after years of record profits for the shipping companies that employ them.

The strike also raises political obstacles for President Biden, who has stood behind the ILA and the collective bargaining process despite pressure to freeze the strike.

Here are five things to know about the strike.

Longshoreman are seeking better pay, automation protection

At stake in the negotiations is a wage and compensation package from the US Maritime Alliance (USMX), an alliance of companies that operate East and Gulf Cost ports, that the union is so far rejecting.

“The Ocean Carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject,” the ILA said in a Monday statement.

President Biden called out the outsized profitability of port operators in a Monday statement. 

“Ocean carriers have made record profits since the pandemic and in some cases profits grew in excess of 800 percent compared to their profits prior to the pandemic,” the president said in a Tuesday statement.

Corporate profits in general hit record highs in the aftermath of the pandemic following heaps of stimulus sent out by the government, and profits now represent roughly the largest share of value in the economy since the 1930s.

Automation is also a big issue for longshoremen, just as it is for workers in many different industries who have undertaken recent labor actions.

“I got some news for those same naïve people that think [automation is] a good thing,” ILA member Jack Pennington wrote in a Monday blog post.

“When the Big Three automakers decided to install robotic welders, painters, upholsterers, machinists, assemblers and countless other robots into production with the false pretense and promises that it would – remember this quote – ‘save the consumer money,’ well I ask you this question: Did it cut costs of an automobile? The answer is an easy, ‘No!’” he wrote.

USMX said Monday that it has offered an increase in compensation but wants to keep its current contractual language around automation.

“Our offer would increase wages by nearly 50 percent, triple employer contributions to employee retirement plans, strengthen our health care options, and retain the current language around automation and semi-automation,” USMX said in a statement.

A weeks-long strike could hit economy hard

Labor and business experts told The Hill that the strike could cost as much as $5 billion a day.

Both exports and imports are likely to be affected by the strike, though labor experts emphasized to The Hill the economic consequences for U.S. exports in particular.

Arthur Wheaton, director of labor studies at Cornell University, said the current strike will have a “broader impact” than a recent labor action that affected West Coast ports.

“This hurts our ability to export,” he said in an interview Tuesday. “Almost two out of three containers that leave the U.S. go through those eastern ports. The western ports have a lot more incoming, so [labor actions there] are hurting the foreign-owned entities coming in. This one will hurt the exporters because they won’t be able to send their BMWs from South Carolina over to Europe.”

The National Association of District Export Councils (NADEC) said Tuesday they want negotiations to resume toward a “win-win settlement.”

“NADEC urges all parties to resume negotiations and reach a win-win settlement that preserves the essential flow of U.S. goods,” the group said in a statement sent to The Hill.

West Coast dockworkers have a separate union from East Coast workers. West Coast longshoremen got a new 6-year contract last year that included a 32 percent raise. 

The economy is top of mind for American voters ahead of the November election, ranking as the top issue in many different polls.

Vice President Harris is facing significant pressure to sell voters on her approach to the economy, as she and President Biden have trailed former President Trump on that issue, which is the most important one for voters in the upcoming elections, according to various polls.

Strike puts Biden in tough spot with labor

Biden has embraced unions and organized labor as few presidents have, even joining an active United Autoworkers (UAW) picket line last year, becoming the first president to do so.

The summer of 2023 – informally termed the “summer of strikes” – included an array of high-profile work stoppages in various industries, and the White House aligned a lot of messaging with that activity.

Biden released a statement Tuesday encouraging collective bargaining and supporting the rights of workers.

“Collective bargaining is the best way for workers to get the pay and benefits they deserve. I have urged USMX, which represents a group of foreign-owned carriers, to come to the table and present a fair offer to the workers of the International Longshoremen’s Association that ensures they are paid appropriately in line with their invaluable contributions,” he said.

However, the economic effects of an East Coast port strike, which are global in nature and affect trade and policy planning decisions in many different countries that are difficult to coordinate, may compel legal action from the White House.

The Taft-Hartley option

Such legal action could invoke the 1947 Labor Management Relations Act, also known as Taft-Hartley, which is designed to curb the power of labor unions. Biden said he doesn’t want to use Taft-Hartley, but it is an option for him.

“There’s collective bargaining, and I don’t believe in Taft-Hartley,” Biden said Monday.

Taft-Hartley works when the president declares a national economic emergency, setting off a legal process in which the existing unionized workforce is ordered back to work while negotiations continue. If workers refuse, then they can legally be replaced under U.S. labor law.

A similar process occurred with air traffic controllers during the Reagan administration, Cornell’s Arthur Wheaton said, though he said that Taft-Hartley has never formally been used. Wheaton cautioned that replacing the skilled unionized workforce with unskilled labor would not be a good idea.

“Taft-Hartley halted what had been a remarkable decade of progress for working people, tamed union militancy, and set the stage for the long decline of the U.S. labor movement. We are still feeling its effects today,” Jonathan Kissam, communications director for labor group UE, wrote in a 2022 historical article.

Sen. Bernie Sanders (I-Vt.) encouraged Biden Tuesday not to invoke Taft-Hartley.

“President Biden is right. He should not invoke Taft-Hartley to end the port strike. Dock workers are striking against excessive corporate greed. The shipping industry has made $400 billion in profits since 2020. It's time for dock workers to be treated with respect, not contempt,” he wrote online.

Strike follows big wins for labor unions

The summer of strikes resulted in some major wins for labor unions, ranging from the United Auto Workers (UAW), Teamsters and SAG-AFTRA.

UPS Teamsters described their wage gains as “historic” in a recent contract ratification announcement.

“Existing full- and part-time UPS Teamsters will get $2.75 more per hour in 2023. Over the length of the contract, wage increases will total $7.50 per hour,” the union said.

The UAW won the elimination of a tiered wage system that split workers up who work in the same facilities doing the same jobs.“Tiered wage schemes in collective bargaining agreements began in earnest in the 1980s as employers sought labor concessions in an increasingly deregulated and globalized economy,” the American Bar Association wrote in a summary of the deal in January.