Longshoremen strike deadline looms large over economy and election

Tens of thousands of longshoremen at 14 ports along the East Coast and Gulf of Mexico are poised to walk off the job early Tuesday morning if their union and employers cannot reach a new labor agreement by midnight, threatening to disrupt both the economy and the 2024 election.

Negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) soured earlier this summer, and the two sides remain far apart on key issues with the contract set to expire Oct. 1.

The ILA says it represents about 85,000 longshoremen, and the USMX says the current contract covers around 25,000 port workers. This would be the union’s first strike at all East Coast and Gulf Coast ports since 1977.

The ports handle a majority of U.S. container volume and a quarter of annual international trade in the U.S. — about $3 trillion, according to the business research nonprofit The Conference Board.

“A one-week strike could cost the economy $3.78 billion and increase the cost of consumer goods, putting pressure on inflation,” The Conference Board wrote.

Estimates for the economic impact of the strike vary widely, from the $540 million per day forecast by The Conference Board estimates to as high as $5 billion, according to analysts at JPMorgan.

Despite the potential economic impact, the White House has said it is not considering invoking the Taft-Hartley Act, the 1947 law that allows the president to request an 80-day court-ordered cooling-off period if a strike would “imperil the national health or safety.”

When President Biden was asked Sunday whether he would intervene to stop the impending port strike, he said “no.” 

When asked why, the president cited “collective bargaining.”

“We support collective bargaining. We believe it’s the best way for both American workers and employers to come to a fair agreement — one that benefits the workers in a way that reflects the success of the companies,” said White House spokesperson Robyn Patterson.

Patterson also noted that this weekend, “senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly– one that reflects the success of the companies. Senior officials have also been in touch with the ILA to deliver the same message.”

The union is demanding a ban on the automation of cranes, gates and container trucks as well as higher wages.

In announcing statewide preparations for the strike Monday, New York Gov. Kathy Hochul (D) called on both sides to “come to an agreement that respects workers and ensures commerce can continue through our nation’s busiest ports here in New York.”

Rep. David Rouzer (R-N.C.), who represents Wilmington, one of the sites of the potential port strikes, took aim at the Biden administration in a Monday morning post on the social platform X.

“A week-long strike would create a backlog at our ports until November. The Biden-Harris Administration has failed to act to protect our economy and American consumers,” Rouzer said.

Some lawmakers have expressed their support for striking workers while calling for an agreement to minimize the economic impact.

Rep. Jerry Nadler (D-N.Y.), who represents part of Manhattan, said he is “proud to stand with [the longshoremen] as they fight for the fair wages, protections, and respect they deserve.” 

“The longshoremen are the backbone of the US economy, keeping our ports and supply chain running smoothly. During the pandemic, the longshoremen stood with us to keep shelves stocked across the nation,” Nadler said. 

“It is my hope that both parties quickly come to an agreement to prevent a strike with wide-ranging impacts on the port operators, economy, and longshoremen.”

Rep. Troy Carter (D-La.), who represents New Orleans, another potential strike site, said “both parties must come together in good faith to find a solution that respects worker rights while minimizing economic disruption.”

“Every worker deserves fair pay for their labor. Period. I fully support the International Longshoremen Association’s right to bargain for fair pay, benefits, and safe working conditions. I also recognize the significant impact a strike of this scale could have on the U.S. economy,” Carter said.

Former President George W. Bush was the last president to invoke Taft-Hartley, using it in 2002 to end the lockout of longshore workers represented by the International Longshore and Warehouse Union.

But pulling that lever would be a “political minefield so close to the election,” The Conference Board said.

The move also could jeopardize Biden’s stated goal to be the most pro-union president in U.S. history.

“Given that the president and vice president have been committed to supporting the labor movement, I think they understand that invoking Taft-Hartley would be seen by the labor movement as being a pretty significant threat to their autonomy and ability to bargain across the table from their employers,” said Alex Hertel-Fernandez, an associate professor of international and public affairs at Columbia University and a former Labor Department official.

While Biden and Congress did intervene to avert a massive railway strike in 2022 under the Railway Labor Act, which governs disputes specifically between rail carriers and unions, Hertel-Fernandez pointed out that the “economy is in a very different place than it was during the potential rail strike.”

“We had pretty significant supply chain disruptions because of bottlenecks in trucking, in rail transport, that meant that consumers were already facing a lot of challenges in getting the goods that they were increasingly demanding,” Hertel-Fernandez said.

Inflation has also fallen significantly from 6.5 percent in December 2022, when Biden signed the bill to avert the rail strike, to 2.5 percent in August.

Biden, who became the first president to walk the picket line during the United Auto Workers strike less than a year later, won the backing of most labor unions before he dropped out of the race in July.

Vice President Harris has continued to garner key union endorsements since she launched her campaign in mid-July, especially as union members in key swing states could tip the balance of the race.

ILA President Harold Daggett said in a press release this summer he has a “long relationship” with former President Trump that the two had a “productive meeting” in November.

According to Daggett, Trump “promised to support the ILA in its opposition to automated terminals in the U.S.,” a key concern for the union.

“Automation is a big part of this, and it’s the concern that workers all across the economy have. The difference here is that the workers at the ports have a union to address those concerns and the vast majority of workers in the private sector don’t have that ability, and so lack the ability to have a say in how automation or AI will be used at their jobs,” Hertel-Fernandez said.

While many retailers have already taken steps to mitigate the potential impact of a strike by bringing in products earlier or shifting products to the West Coast, a strike has businesses worried.

U.S. Chamber of Commerce President Suzanne Clark pushed Biden on Monday to invoke Taft-Hartley, warning it “would be unconscionable to allow a contract dispute to inflict such a shock to our economy.”

“These ports collectively handle more than 68 [percent] of all containerized exports and 56 [percent] of imports for the nation, with a daily trade value exceeding $2.1 billion,” Clark wrote. “Simply put, you have the authority to keep contract negotiations going while keeping the ports open.”

Nearly 200 business and industry groups called on Biden earlier this month to get the ILA and USMX back to the bargaining table.

“The global supply chain is a complex system and even a minor disruption would have a negative impact and cause delays at a critical time for both retailers and consumers,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.

Alex Gangitano contributed.