Tens of thousands of dockworkers are walking the picket lines at ports along the East and Gulf Coasts. The strike of about 45,000 longshoremen and port operators could have a major effect on the country’s economy.
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The strike from Maine to Texas started at 12:01 a.m. Tuesday, The New York Times reported.
Workers demand higher pay and automation controls and is the first strike since 1977, according to The Associated Press .
Port workers in Philadelphia chanted “No work without a fair contract” and a truck parked near the picket lines had a sign that read “Automation Hurts Families: ILA Stands For Job Protection.” Union workers said the strike would continue until a deal is made.
“This is not something that you start and you stop,” Philadelphia’s International Longshoremen’s Association president Boise Butler said.
The union wanted a 77% pay raise over the six years of the contract to compensate for inflation and several years of small raises. A base salary currently is $81,000 but some workers earn more than $200,000 annually due to overtime, the AP reported.
The U.S. Maritime Alliance that controls the ports offered a 50% pay raise, to keep the limits on automation in current contracts, to triple employer contributions to retirement plans and to provide better health care.
Supply chains are not expected to be impacted in the short term because retailers already have stock on hand. But if the strike lasts more than a few weeks, there could be higher prices and supply chain delays and holiday items such as toys and artificial Christmas trees, along with cars, coffee and fruit could held up.
Typically the East Coast ports bring in items such as coffee, bananas, European alcohol, car parts, furniture, cotton and wood, the Times reported using Census Bureau data.
Some ships could be sent to the West Coast where workers are represented by a different union, but there could be a backup, the AP reported. Once offloaded, goods could be shipped cross-country by train but it won’t be the same rate of distribution that the East Coast ports provide.
J.P. Morgan estimated that the strike could cost the economy $3.8 billion to $4.5 billion daily, the AP reported. Once an agreement is reached, Oxford Economics analysts predicted it would take a month for each week of the strike to clear the backlog of deliveries, The New York Times reported.
Jason Miller, a professor of supply chain management at Michigan State University, told the Times that if the strike lasts two or three days it won’t have much of an impact on the supply chain, but if the strike lasts a week or more, “that’s when we’re looking at multibillion-dollar impacts per day.” There could also be layoffs at other companies as a result of the strike.
President Joe Biden could have stepped in and used the Taft-Hartley Act to have both sides participate in an 80-day cooling-off period, but he said he would not. Biden had been rounding up union support for the Democratic party, the AP and The New York Times reported. The president was in communication with both the ILA and the alliance urging both sides to continue the talks.
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