Port Workers are Set to Strike Tuesday 10/1

[bèlla]

Port Workers from Maine to Texas are Set to Strike Tuesday. Expect Shortages and Higher Prices.​

Longshore workers at ports from Maine to Texas are set to walk off the job early Tuesday, staging what could become the most disruptive strike to the US economy in decades.

The strike could stop the flow of a wide variety of goods over the docks of almost all the cargo ports on the East Coast and Gulf Coast - everything from bananas to European wine and liquor, along with clothing, toys, household goods and European autos. Also affected could be parts needed to keep US factories operating and American workers in those plants on the job.

The ports involved include the Port of New York and New Jersey, the nation’s third-largest port by volume of cargo handled. But it also includes ports with other specialities.

Stuck on the sidelines and watching with great concern are businesses that depend on the movement of goods.

Some, especially retailers, have rushed to get their goods in ahead of the October 1 deadline, said Jonathan Gold, vice president of supply chain and custom policy for the National Retail Federation. They’re scrambling to make sure their containers of goods are moved out of the ports before Monday night. But there will still be disruptions, no matter the planning, he said.

“A one-day shutdown takes three to five days to recover from,” Gold said.

 

[Laodicean60]

This will be interesting. In a couple of weeks, I'll ask my wife to go shopping a do a price check to see how much the costs of goods have gone up.

 

[Vambram]

From the CNN article:
The USMX calls the union’s demands unreasonable. Thursday it announced it had filed an unfair labor practice complaint with the National Labor Relations Board, seeking to get the union to return to in-person negotiations, although that filing is more for show than anything else since it is virtually impossible the labor regulator would act before Monday night’s deadline.
“We remain prepared to bargain at any time, but both sides must come to the table if we are going to reach a deal, and there is no indication that the ILA is interested in negotiating at this time,” said a statement earlier this week from the management group.
USMX has offered upwards of 40% in wage increases over the six-year contract, a person with knowledge of negotiations said. The ILA is reportedly asking for raises of $5 an hour, per year, which would be an immediate 12.8% pay hike on the current top pay of $39 an hour. Repeating that $5 an hour increase each year would result in raises totaling 77% during the life of the contract.
The union says it has continued to talk with the USMX, just not in face-to-face negotiations. It said management knows what it is demanding in order to get a deal done, and that any strike will be management’s fault, not the union. It did not comment on the $5 an hour demand, but it says that $5 an hour of increases works out to an average annual pay increase of just under 10%, which they say is reasonable given the level of profits in the shipping industry.
“My ILA members are not going to accept these insulting offers that are a joke considering the work my ILA longshore workers perform, and the billion dollar profits the companies make off the backs of their labor,” said Harold Daggett, the ILA’s international president and chief negotiator, in a statement.
Shipping rates soared during and immediately after the pandemic, as supply chains snarled and demand surged. Industry profits topped $400 billion from 2020–2023, according to analyst John McCown, which is believed to be more than the industry had previously made in total since containerization started in 1957.

 

[Danthemailman]

Dockworkers go on strike at East and Gulf Coast ports

Dockworkers at seaports on the East and Gulf Coasts went on strike Tuesday after negotiations with port employers over a new contract remained at an impasse.

www.foxbusiness.com

 

[wing2000]

...enjoy your cheap bananas now.

 

[DaisyDay]

Didn’t the NRLB get gelded by the Supreme Court?

 

[ThatRobGuy]

"USMX has offered upwards of 40% in wage increases over the six-year contract, a person with knowledge of negotiations said. The ILA is reportedly asking for raises of $5 an hour, per year, which would be an immediate 12.8% pay hike on the current top pay of $39 an hour. Repeating that $5 an hour increase each year would result in raises totaling 77% during the life of the contract."


Maybe this is just their negotiation tactic in hopes that they'll get a little more...but, on paper, that does appear to be a big ask. (that I would say is an unreasonable demand).


Sounds like prices are going to jump no matter how this shakes out.

We get to choose between price increases due to shortages, or price increases due to wage demands of dock workers.


At least on the surface, USMX offering 40% wage increases over a six year period sounds like a pretty reasonable offer. The average longshoreman here in Ohio makes around 60k per year. Under the USMX offer, they'd be making $84k by the end of the six year contract.

Under the ILA demand of +$5/hour, year over year, for the next six years, would equate to around an additional $50-60k in wages, putting them at around $115k at the end of the six years.


To me, the the prospect of dock workers making $84k/year seems more reasonable than paying them almost as much as some doctors make.

For them to call the $84/year offer "insulting", to me, seems like they may be trying to "outkick their coverage" just a bit.

And them predicating that on "look much money the industry made!" displays a certain ignorance on how labor/business works. This idea that wages have to be proportional to profits or CEO salaries (for similar tasks that wouldn't pay nearly that much elsewhere) is a skewed perception.

What the CEO makes is largely irrelevant. There needs to be a compelling argument beyond that because often times the math relating to their demands doesn't line up.

For instance, if I were a CEO making $5 million a year, and had 5,000 employees making $35k/year... If they're going to say "Nah, we actually want $70k because Rob's making $5M", even if I scraped my whole salary and divided it up amongst all of them and worked for free, that would only equate to an extra $1000 bucks per person.

Wages should be driven on difficulty of the task and rarity of the skill required to accomplish the task.
If AMC movie theaters started having massive record profits, that wouldn't be justification for paying the ticket clerk at the counter $65k/year when their job isn't any more functionally difficult or complex than that of the cashier at the local grocery store.


I'm not opposed to workers having some leverage through collective bargaining, but I do think that leverage can be abused, and there do need to be some safeguards in place that give these industries an "escape hatch" to be able to switch to non-unionized labor should unbiased 3rd party(ies) or review boards conclude that the demands are, indeed, unreasonable, so that certain unions don't have the ability to hold a sizeable percentage of the public as "economic hostages" so to speak.

 

[bèlla]

With the possibility of delays, shortages and buying restrictions it's recommended that you pick up necessities as needed. Beverages are impacted by the strike which includes coffee. You were warned. ;-)

~bella

 

[wing2000]

I ordered my 6 weeks supply of coffee beans today.....maybe I should have ordered more.

 

[iluvatar5150]

"USMX has offered upwards of 40% in wage increases over the six-year contract, a person with knowledge of negotiations said. The ILA is reportedly asking for raises of $5 an hour, per year, which would be an immediate 12.8% pay hike on the current top pay of $39 an hour. Repeating that $5 an hour increase each year would result in raises totaling 77% during the life of the contract."


Maybe this is just their negotiation tactic in hopes that they'll get a little more...but, on paper, that does appear to be a big ask. (that I would say is an unreasonable demand).

I wouldn't say it's unreasonable. The pay raises in their last contract from 2018-2014 were pretty weak: $1/hr/yr (a bit under 3%) only for the guys who'd been there 6+ years. Pay scales for the new guys stayed where they'd been since 2013.

https://www.ila953.com/wp-content/uploads/2021/02/Master-Contract-2018.pdf

Adjusted for inflation, they're all making less now than they were when the contract went into effect. If their $35/hr rate from 2018 had kept up with inflation, it would be just shy of $44/hr, which is, coincidentally, exactly what their first year's raise would put them at.

To me, the the prospect of dock workers making $84k/year seems more reasonable than paying them almost as much as some doctors make.

Unless they're doing a bunch of charity work, most any GP or low-paid specialty is clearing close to $200k/yr, today. In 6 years, it'll be higher.

For them to call the $84/year offer "insulting", to me, seems like they may be trying to "outkick their coverage" just a bit.

And them predicating that on "look much money the industry made!" displays a certain ignorance on how labor/business works. This idea that wages have to be proportional to profits or CEO salaries (for similar tasks that wouldn't pay nearly that much elsewhere) is a skewed perception.

You can complain that it's skewed, but it's exactly how a lot of B2B businesses price their offerings. "Corporate rates" are absolutely a thing.

Wages should be driven on difficulty of the task and rarity of the skill required to accomplish the task.

What drives wages is leverage. Rarity of the skill is one factor in leverage. Collective bargaining is another.

If AMC movie theaters started having massive record profits, that wouldn't be justification for paying the ticket clerk at the counter $65k/year when their job isn't any more functionally difficult or complex than that of the cashier at the local grocery store.

But it would mean that there would be something for the ticket takers to bargain for.

I'm not opposed to workers having some leverage through collective bargaining, but I do think that leverage can be abused, and there do need to be some safeguards in place that give these industries an "escape hatch" to be able to switch to non-unionized labor should unbiased 3rd party(ies) or review boards conclude that the demands are, indeed, unreasonable, so that certain unions don't have the ability to hold a sizeable percentage of the public as "economic hostages" so to speak.

I think the ILA's history of blocking automation is bad, but nothing about these wage demands are unreasonable.

 

[durangodawood]

.....which includes coffee. You were warned. ;-)

~bella

That scared me into action like little else can.

 

[ThatRobGuy]

I wouldn't say it's unreasonable. The pay raises in their last contract from 2018-2014 were pretty weak: $1/hr/yr (a bit under 3%) only for the guys who'd been there 6+ years. Pay scales for the new guys stayed where they'd been since 2013.
https://www.ila953.com/wp-content/uploads/2021/02/Master-Contract-2018.pdf
Adjusted for inflation, they're all making less now than they were when the contract went into effect. If their $35/hr rate from 2018 had kept up with inflation, it would be just shy of $44/hr, which is, coincidentally, exactly what their first year's raise would put them at.

Wages shouldn't be tied to inflation rates

It can certainly be a point of consideration for certain employers if they opt to be "nice" and give out a COLA or a one-time bonus of some sort to help cover the amount.

But that's certainly not a pattern that can be repeated indefinitely.

If there was always an expectation that wages should keep up with inflation, then that creates more upward pricing pressure, which in turn, leads to even more inflation.

I would go as far as suggesting that wages shouldn't be heavily anchored to CPI either, for the exact same reason.


...because whenever there's public discourse about anchoring wages to CPI or Inflation, it always seems to be very one directional.

Workers tend to always say
"Prices are up 20% compared to where they were last year, therefore, I think we should raise wages accordingly"

Yet, there's never any workers who say
"Prices came back down, so we should lower wages accordingly"

 

[iluvatar5150]

Wages shouldn't be tied to inflation rates

Then it’s just leverage, I guess.

It can certainly be a point of consideration for certain employers if they opt to be "nice" and give out a COLA or a one-time bonus of some sort to help cover the amount.

But that's certainly not a pattern that can be repeated indefinitely.

Every job I’ve ever had has given annual raises that at least covered inflation.

If there was always an expectation that wages should keep up with inflation, then that creates more upward pricing pressure, which in turn, leads to even more inflation.

But not an equivalent amount of inflation.

Yet, there's never any workers who say
"Prices came back down, so we should lower wages accordingly"

If we’re in a deflationary environment, wages go down on their own.

 

[Gnarwhal]

Apparently USMX already upped their offer to over 50% but the ILA rejected it, according to Jason Miller (interim chairperson for the department of supply chain management at Michigan State).

If this strike protracts at all I wonder if ships will be redirected to west coast ports? Kind of the reverse of the problem we had during the Covid lockdown when ships were sitting offshore from California and Ron DeSantis told them to redirect to Florida cause their ports were open. I mean, there are at least five major ports along the west coast if the shipping companies can afford to redirect that many through Panama into the Pacific. But if they could they'd have access to Ports in LA, Long Beach, Oakland, Tacoma and Seattle. The cost and logistics I'm sure are enormous but after a certain point I would think the potential losses would justify those costs.

 

[ThatRobGuy]

Every job I’ve ever had has given annual raises that at least covered inflation.

That's great, but it should be known that those kinds of business practices are what lead to higher prices eventually.

There's never gonna be such a thing as "A grocery store bagger who can buy a vacation home and sports car on their salary". If we get to a point where baggers are making $100k/year some day, it'll be because every consumer good/service out there has gone up by 5-6x.

But not an equivalent amount of inflation.

I don't think that's a guarantee that anyone can make. We haven't had an extended time that I can recall where wages have been 100% anchored to the CPI or inflation rate. Even with wage increases that have lagged behind inflationary increases by quite a bit, prices on a lot of things have still gone up and triggered additional inflation. (It's called "wage-push inflation")

If we’re in a deflationary environment, wages go down on their own.

I'm not referring to a full blown deflation (in terms of a contraction of the money supply)

If you're referring to soft deflation, where it's just an overall price decrease on everything, then that's more likely to result in layoffs than wage reversals (there's a number of reasons why management opts for the former), but periods of that type of deflation usually self-correct pretty quickly, and there's more levers that can be pulled to correct deflation vs. push-inflation. Since the government can always intentionally trigger inflation on-demand through expansion of the money supply (done carefully of course)

However, there's not really a "quantitative easing equivalent" going in the other direction. That's why for the better part of the last 60 years, inflation has always been a bigger concern than deflation. I think about the only time I can remember deflation being a concern was from 2007-2009.

 

[Arcangl86]

Apparently USMX already upped their offer to over 50% but the ILA rejected it, according to Jason Miller (interim chairperson for the department of supply chain management at Michigan State).

If this strike protracts at all I wonder if ships will be redirected to west coast ports? Kind of the reverse of the problem we had during the Covid lockdown when ships were sitting offshore from California and Ron DeSantis told them to redirect to Florida cause their ports were open. I mean, there are at least five major ports along the west coast if the shipping companies can afford to redirect that many through Panama into the Pacific. But if they could they'd have access to Ports in LA, Long Beach, Oakland, Tacoma and Seattle. The cost and logistics I'm sure are enormous but after a certain point I would think the potential losses would justify those costs.

Wouldn't work. The ships are contacted to bring the cargo to a certain port. If the shipping company does not deliver where it is supposed to, then it is in breach of contract.

 

[bèlla]

I ordered my 6 weeks supply of coffee beans today.....maybe I should have ordered more.

You may be okay but the price could go up. If you enjoy wine you may want to grab some.

That scared me into action like little else can.

Coffee will do that. ;-)

~bella

 

[iluvatar5150]

Apparently USMX already upped their offer to over 50% but the ILA rejected it, according to Jason Miller (interim chairperson for the department of supply chain management at Michigan State).

If this strike protracts at all I wonder if ships will be redirected to west coast ports? Kind of the reverse of the problem we had during the Covid lockdown when ships were sitting offshore from California and Ron DeSantis told them to redirect to Florida cause their ports were open. I mean, there are at least five major ports along the west coast if the shipping companies can afford to redirect that many through Panama into the Pacific. But if they could they'd have access to Ports in LA, Long Beach, Oakland, Tacoma and Seattle. The cost and logistics I'm sure are enormous but after a certain point I would think the potential losses would justify those costs.

I’d be surprised if those ports had the excess capacity.

There's never gonna be such a thing as "A grocery store bagger who can buy a vacation home and sports car on their salary".

Nobody is arguing for that. The longshoremen are asking for the same purchasing power they had in 2018. Even once they catch up for 2024, they’ll still have been behind the curve for several years.

If we get to a point where baggers are making $100k/year some day, it'll be because every consumer good/service out there has gone up by 5-6x.

We will get there eventually.

I don't think that's a guarantee that anyone can make.

Sure it is. Most finished goods have inputs that aren’t tied to labor costs, er go, an x% increase in labor costs will necessarily result in a <x% increase in prices.

I'm not referring to a full blown deflation (in terms of a contraction of the money supply)

The inflation and deflation metrics we’re using are a measure of prices, not money supply.

If you're referring to soft deflation, where it's just an overall price decrease on everything, then that's more likely to result in layoffs than wage reversals (there's a number of reasons why management opts for the former), but periods of that type of deflation usually self-correct pretty quickly, and there's more levers that can be pulled to correct deflation vs. push-inflation. Since the government can always intentionally trigger inflation on-demand through expansion of the money supply (done carefully of course)

However, there's not really a "quantitative easing equivalent" going in the other direction. That's why for the better part of the last 60 years, inflation has always been a bigger concern than deflation. I think about the only time I can remember deflation being a concern was from 2007-2009.

You have that backwards. We have more levers to pull to curb inflation. We have far fewer options in a deflationary economy, which tends to feedback on itself.

 

[Vambram]

East and Gulf coast ports shut down as thousands of workers go on strike

Longshoremen are demanding higher pay and protections against automation.

www.nbcnews.com

Besides pay increases, another major reason the LMA is striking is that they want protections from automation.

 

[iluvatar5150]

East and Gulf coast ports shut down as thousands of workers go on strike

Longshoremen are demanding higher pay and protections against automation.

www.nbcnews.com

Besides pay increases, another major reason the LMA is striking is that they want protections from automation.

I’d prefer to see them get bigger-than-requested raises and lose the automation fight.