Sleeping giant that’s threatening to torpedo US economy

A strike by the largest dock worker group in the US could bring the country’s shipping industry to a standstill, several have warned.

The International Longshoremen’s Association (ILA) threatened a strike for the first time since 1977 and asked for their demands to be met in October.

If not, 85,000 workers at 36 ports on the East Coast and the Gulf of Mexico will walk out of work, causing about $5 billion in losses every day.

The move would also disrupt supply chains that have only just recovered from the pandemic, further increasing inflation and the cost of living.

Experts warned against the concept this week as the deadline is fast approaching.

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The strike would cause “a sharp increase in shipping costs, similar to the supply chain disruptions during the COVID-19 pandemic,” prominent economist Peter C. Earle told reporters. The daily caller.

The senior economist at the American Institute for Economic Research then compared expected price increases to those seen “during 2021 and 2022,” when the outbreak ensnared several economies.

“The Cleveland Division of the Federal Reserve claims that 40 to 60 percent of price increases in the post-pandemic period, especially in the energy, food and shipping sectors, were driven by stretched supply chains,” he added.

Inflation seen since then continues to disrupt Americans’ lives, even after falling to 3 percent in July.

Under the current government, which has been criticized for its handling of the recent supply chain crisis, this figure has risen to a whopping 9.1 percent.

Secretary of Transportation Pete Buttigieg notably took two months of paternity leave and refused to attend important meetings at the time.

The decision sparked attacks from the Republican Party. Despite a wave of factory closures and sick workers, there was no strike.

With negotiations over workers’ wages seemingly collapsing this month, the “sleeping giant” ILA that could slow the US economy is set to emerge, its boss warned last week.

“A sleeping giant is ready to roar on Tuesday, October 1, 2024 if there is no new Master Contract Agreement,” said ILA President Harold J. Daggett.

“My members have been preparing for the possibility of a strike for over a year.”

Reports indicate that Daggett and his colleagues want a 77 percent pay increase over six years – and have already rejected a 40 percent offer.

On the other side of the negotiations is the United States Maritime Alliance (USMX), an organization started decades ago during similar talks that represents the interests of the carriers, stevedores and port associations at the ILA.

The group said it remains committed to resuming negotiations with the ILA on a new prime contract, and shared a letter stating this earlier this month.

Citing the offer already made, the group said ILA instead “continues to send a strong signal that it has already made the decision to declare a strike.”

‘[W]We hope that the ILA will reopen the dialogue and share its current contract demands so that we can work together on a new deal, as we have done successfully for almost 50 years.”

The group then listed some of the contents of its current offer, including “industry-leading pay increases” and “higher starting wages.”

“Our offer demonstrates our members’ willingness to reach a new deal before the end of this month,” the update continued – but after a meeting between the two sides in Teaneck, New Jersey, on September 5, it appears that a solution may not be feasible. reaches.

Such a prospect, Earle said Thursday, could spell doom for the U.S. economy.

“Even a brief disruption can have ripple effects that exacerbate the regularly tense holiday season,” Earle told the Caller four days before the deadline.

“With inflation still significantly above the Federal Reserve’s target and unemployment rising, consumers could face an expensive holiday season with delayed shipments and higher gift costs.

Such a combination of supply chain disruptions and economic pressures could further burden households during one of the busiest shopping seasons of the year.”

Another person who spoke to the outlet was labor expert Sean Higgins of the Competitive Enterprise Institute, who said he expects the federal government to intervene now.

“The Biden administration has a track record of stepping in and forcing a deal when they feel the broader economy is threatened, especially when it’s a supply chain issue,” Higgins told the website, telling onlookers recalled last November’s White House Council on the Supply Chain. Resilience Act, and EO 14017 of 2021, which spent millions to strengthen “the resilience of critical supply chains.”

“No one should therefore be surprised if the government intervenes again,” Higgins warned.

Biden also signed a bill blocking an upcoming railroad strike in December 2022, Higgins noted.

The measure affected more than 115,000 railway workers with a mandatory contract.

At the time of writing, top workers at the port now earn a base rate of $39 per hour, which equates to approximately $81,000 per year. With overtime and other benefits, some can earn more than $200,000.

When neither the union nor the ports were asked, they would discuss wage levels as the USMX filed a complaint Thursday with the National Labor Relations Board (NLRB) accusing the ILA of unfair labor practices.

The alliance said in a statement on Thursday that it filed the suit “due to the ILA’s repeated refusal to come to the table and negotiate a new framework contract,” while the ports are now asking for relief.

Such an order would require the union to resume negotiations, and in an email to the AP Thursday, the NLRB said it is investigating the complaint.

However, it is unlikely the board will make a decision before the looming deadline, as the NLRB says it typically takes seven to 14 weeks to determine the merits of a charge.