Dockworkers Strike Threatens US Trade and Economy
Tens of thousands of dockworkers have gone on strike indefinitely at ports across much of the US, causing significant 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 coasts, halting container traffic from Maine to Texas. This marks the first such shutdown in almost 50 years.
The strike is centered around a six-year master contract that covers about 25,000 port workers employed in container and roll-on/roll-off operations. Talks have been stalled for months, and the current contract between parties expired on Monday. Union boss Harold Daggett is pushing for significant pay increases for his members and voicing concerns about threats from automation. The US Maritime Alliance (USMX) has accused the union of refusing to bargain and has filed a complaint with labor regulators.
The strike is expected to impact time-sensitive imports, such as food, as well as agricultural exports, tin, tobacco, nicotine, clothing, footwear, and European carmakers. The disruption could lead to price rises and shortages in goods over the coming weeks if the strike persists.
Economists estimate that more than a third of exports and imports could be affected by the strike, resulting in a hit to US economic growth of at least $4.5 billion each week. More than 100,000 people could find themselves temporarily out of work as the impact of the stoppage spreads.
The strike injects uncertainty into the US economy at a critical time, with the presidential election approaching in six weeks. President Biden has the power to suspend the strike for 80 days for further negotiations but has indicated he is not planning to act. The US Chamber of Commerce has called on President Biden to intervene, citing the potential shock to the economy.
The outcome of the strike could have implications for the election, with the cost of alienating allies in the labor movement just weeks before the election being a significant concern. Public support for the strike could also be tested, as the dockworkers’ concerns about cost-of-living and automation come to the forefront. The pressure of the strike may force employers back to the table with a more substantial offer to resolve the dispute.
