Taking temporary measures to prevent tumbling off the fiscal cliff, extending the milk subsidy, delaying sequestration and partially extending the Bush tax cuts are examples of stopgap measures undertaken to prevent further economic damage.
However, the United States is involved in another stopgap negotiation that could wreak havoc on the economy that few in the media are talking about.
Although it received little attention, last Friday the International Longshoremen’s Association and the U.S. Maritime Alliance agreed to extend the terms of their expiring labor pact for 30 more days while negotiators try to hammer out details of their settlement.
This 30-day reprieve only puts a temporary halt to a threatened move by 14,500 dockworkers to walk out on strike.
Every American should be watching this issue with great alarm, since exports generate $2.1 trillion a year, almost all of it passing through docks on the East and West coasts. And this doesn’t take into account the billions that might be lost by U.S. importers that rely on foreign parts and goods for manufacturing and retail.
The 14 ports that were threatened with the strike handled 110 million tons of cargo last year and included Boston; New York-New Jersey; Baltimore; Charleston, S.C.; Savannah, Ga.; Miami; and Houston.
In 2002, striking dockworkers staged an 11-day lockout that closed 29 West Coast ports and cost the nation’s economy $1 billion a day until President George W. Bush invoked the Taft-Hartley Act and ordered the ports reopened. In 1977, a two-month, coast-wide strike paralyzed the flow of tens of billions of dollars of imports.
At a time when a new recession looms, can this country afford another financial setback? And why are the dockworkers threatening to strike? Because the union doesn’t think that the average hourly rate of $55.00 per longshoreman is enough and they want to continue “container royalties” that are worth up to $15,000 a year for an average longshoreman.
The New York Times notes that East Coast and West Coast dockworkers have separate unions. The West Coast association — the International Longshore and Warehouse Union — is known for being leftist and active in politics. It supported the Occupy Wall Street movement, and on Nov. 27, the union’s clerical workers, worried that some jobs were being outsourced, began an eight-day strike that crippled the nation’s two busiest ports — Los Angeles and Long Beach, Calif.
The Times also wrote that “Despite their small numbers, the East Coast dockworkers have outsize influence. Many of them, like the crane operators who transfer containers from ships to the docks, are highly skilled and cannot be easily replaced. And because they control the loading and unloading of goods in most of the nation’s ports, a strike could cause extensive economic damage at a time when the economy is already weak.”
If the country would lose more than a $1 billion per day for every day of the strike, why did the parties involved wait until the last minute to try and settle this issue?
It’s a troubling trend in this country to wait until the last minute to take the bold measures necessary to prevent economic chaos.
This is all the more troubling since once again President Barack Obama has taken a hands-off approach when it comes to unions. It’s part of a bigger scenario that finds Obama making continued concessions to unions, including the billions of dollars that went to the unions at GM.
Throughout the labor negotiations with the dockworkers and their unions, the White House was largely silent. Ironically, this relates to the unions that help control exports, which Obama promised to double within five years. Allowing dockworkers to shut down ports seems to be the wrong approach to meeting this important economic goal and retaining American jobs.
Considering what’s at stake we need to pay attention to these negotiations over the next few weeks because if we allow this strike to proceed, we will find ourselves nearing another kind of cliff that portends more bad news for this economy.
JAN
