(Bloomberg) -- The Biden administration and former President Donald Trump lined up behind the dockworkers who walked out of every major East and Gulf coast port on Tuesday, each accusing the ocean carriers of exploiting workers during the pandemic.
The White House is also calling on the carriers to withdraw any surcharges related to the strike — which halted about 50% of US container trade — and warning them not to exploit any emergencies for profit. The two largest carriers have already announced plans to impose extra fees tied to the work stoppage if it continues more than a few weeks.
President Joe Biden “and Vice President Harris are closely monitoring any attempts by companies to opportunistically raise prices, including ocean shippers or others, during the labor dispute,” Transportation Secretary Pete Buttigieg said a statement Tuesday.
The International Longshoremen’s Association — the 47,000-member labor organization that represents workers in every major port on the Atlantic and Gulf coasts — went on strike after their contract with the US Maritime Alliance, which represents ocean carriers and terminal operators, expired.
ILA President Harold Daggett told longshoremen at the picket line to prepare to stay off the job for as long as it takes to get a deal for even higher pay — the latest demand is a 61.5% raise, according to CNBC — and protections from automation, which could prove to be the bigger obstacle.
The USMX, as the group is known, maintains that the union hasn’t bargained in good faith since calling off negotiations back in June. Hours before the midnight deadline, and with urging from the White House, the USMX extended an offer that would increase dockworker wages by nearly 50% over the new six-year contract, up from a previous offer of almost 40%.
“Our current offer of a nearly 50% wage increase exceeds every other recent union settlement, while addressing inflation, and recognizing the ILA’s hard work to keep the global economy running,” the USMX said Tuesday.
It’s the first time in nearly 50 years these ports have shut down because of a strike and the implications for the world’s biggest economy could be dire, depending on how long the walkout lasts. With just weeks to go before the Nov. 5 election it could also shape the campaigns.
“The strike will disrupt production and lead to loss of income for affected workers, with spillovers down the supply chain,” according to Bloomberg Economics’ Anna Wong and Nicole Gorton-Caratelli. “We estimate a hit to GDP of as much as $3 billion per day from forgone spending and production. A week-long strike could knock 0.3 percentage point off annualized GDP,” they said.
So far, Biden, who considers himself the most pro-union president in American history, has defied calls from various industry and trade groups to intervene, first to prevent the strike, and now to end it using his authority under the Taft-Hartley Act.
Instead, Biden has echoed Daggett’s position that dockworkers deserve a larger share of profits won by foreign-owned container liners during the trade boom — and supply chain crisis — of the pandemic.
“Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits,” Biden said, adding his administration was watching for any price gouging activity that benefits the companies — including those on the USMX board.
The president met with his chief of staff and other senior aides on Tuesday evening to discuss the strike, and reiterated his desire for his team to continue urging the carriers to present a strong offer to the longshoremen. Federal agencies have so far assessed only “limited impacts to consumers,” the White House said, and aides plan to meet daily to help prepare for more substantial supply chain disruptions.
The ILA hasn’t endorsed a presidential candidate, though according to Daggett, Trump “promised to support the ILA in its opposition to automated terminals” during a meeting at his Mar-a-Lago resort last fall. Both campaigns are working hard to win working class and union votes.
Trump faulted his Democratic rival for the high prices he says are behind the impasse at the ports. “This is only happening because of the inflation brought on by Kamala Harris’ two votes for massive, out-of-control spending, and her decision to cut off energy exploration,” the Republican nominee said Tuesday. He also blamed the ocean carriers.
“American workers should be able to negotiate for better wages, especially since the shipping companies are mostly foreign flag vessels, including the largest consortium One,” Trump said, referring to Ocean Network Express. At an event in Wisconsin later on, the Republican nominee said the dockworkers “also don’t want to see certain new technologies, which in many cases don’t work very well.”
The Harris campaign referred a question about the strike to the White House.
Acting Labor Secretary Julie Su, who helped to broker a deal between West Coast dockworkers and their employers last summer, said she’d spent much of the past week urging both sides to reach a fair contract.
“The parties need to get back to the negotiating table, and that must begin with these giant shipping magnates acknowledging that if they can make record profits, their workers should share in that economic success,” Su said.
--With assistance from Josh Wingrove and Dave Merrill.
©2024 Bloomberg L.P.
