Impending port strikes from the dockworkers’ union could shut down East Coast ports, threatening the US economy right before elections.
The dockworker’s union represents about 45,000 workers on the East and Gulf coasts, all of whom will go on strike next week if action is taken. A strike would severely impact the supply chain, and Americans would feel it. The detrimental impacts of the port strike would be reflected in consumer prices, spiking inflation after the government finally regained some control over inflation rates.
As US companies scramble to set backup plans in case ports shut down, the International Longshoremen’s Association (ILA), the dockworkers’ union, will try to strike a labor deal with the United States Maritime Alliance (USMX) before their current contract expires on September 30th.
The critical points of the dispute
If the port strikes happened, it would be the first East Coast strike since 1977. One of the key points of the dispute is salaries.
The West Coast dockworkers earn $54.85 an hour, which can increase to $60.85 in 2027. Comparatively, dockworkers earn $39 an hour, and that’s after six years of working on the docks. On a full-time schedule, West Coast dockworkers earn more than $116,000, compared to the $81,000 dockworkers make on the East Coast.
The disparity in pay ranges between the East and West Coasts has led the ILA to ask for a six-year contract, which could increase their wages to about $69 an hour. The ILA cites the increase in inflation as the primary reason for seeking pay raises for its workers and threatens with port strikes if their requests are not seriously addressed.
Harold Dagget, the president of the ILA, said, “Mark my words, we’ll shut them down October 1 if we don’t get the kind of wages we deserve.”
The ILA is also concerned that automation will lead to job losses, so it proposed a complete ban on automatic cranes, gates, and container movers.
While the ILA worries about automation affecting job security, the USMX said they offered to maintain that ban in the previous contract but left automatic gates. The ILA felt that it violated their labor agreement and suspended negotiations in June.
Port strikes and their potential impact
“In today’s world, I’ll cripple you,” Dagget said recently in a video post by the ILA. “I will cripple you.”
Dagget says that car dealership layoffs and mall closures will occur within weeks and that the port strikes will make national headlines. While the impacts are likely less severe than Dagget claims, the consequences of a strike will still be quite detrimental.
The 36 ports involved in the strike account for more than half of the US imports of goods. Experts estimate that this strike could cost about $5 billion per day.
Moreover, for every day the port strikes continue, it could take close to a week to compensate for each day’s delay. These setbacks would hurt the American population the most, as they would have to compete with worsening inflation daily.
