Port Workers are Set to Strike Tuesday 10/1

ThatRobGuy said:

You can't really detach the two can you? This "capitalism use case" is very ILA-specific. I know you want to abstract it, but it doesn't make sense to do that when the circumstances surrounding this one are so unique. (even within the context of collective bargaining and organized labor)

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ThatRobGuy said:

For the portion that can be abstracted.
For instance, if you want to hire me for $80k, and I'm more than happy to work for $80k...but then a 3rd party (who neither owns the company, nor does the actual work...meaning they've artificially inserted themselves into the transaction) strongarms you into paying me $140k, then obviously I (on the labor side) wouldn't be arguing in that scenario because who wants less money...nobody lol.

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ThatRobGuy said:

But it does distort both the "market transactions" between you as the employer and me as the employee, as well as the market transactions between you and your customers as you now have to adjust your pricing model to accommodate increase labor costs.

And in these sorts of cases where the wages are already high, and ratio between the CEO's income and workers income is already at a healthy sustainable level, demanding too high of an increase creates a situation where the math doesn't even line up.


With regards to this "use case"
25,000 port workers going from $120k to $210k (due to a demanded 77% increase) equates to an extra $2.2 Billion a year in labor costs.

Given that the CEOs of these organizations are only at $3-5 million, and there's 20 of them, it's doubtful that you could offset such an increase if you cut all executive salaries by 40% across the entirety of the 20 organizations that are part of the USMX.

To take the exercise a step further, Kirby (from what I've read) is the largest member organization of USMX, posted net earnings of $122 million in 2022.

Now, if we assumed that every other organization in that list of 20 orgs that run through USXM did roughly similar numbers. (they didn't, obviously the smaller ones did a little less)

That's about ~$2.2 billion in net earnings. ILA is asking for $2.2 Billion in increases to dock workers salaries.


It almost seems like that 77% number (which I thought was an odd number to pick to begin with) isn't one they pulled out of thin air and perhaps it wasn't even based on the merits or difficulty of the task itself. It seems like this could be a scenario of:
"We know that last year, after all expenses were covered, these companies had a collective $2.2 billion dollars left, we want all of that"

Which means that they're not looking for any "fair split of proceeds" between labor and capital, or any split of proceeds for that matter, they want 100% of the proceeds, they're not even looking to split it with other members of "labor" who aren't specifically part of their organization. (I'm sure the other employees who work for Kirby and the other companies who aren't dockworkers may like a pay increase of some sort next year, right?)

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ThatRobGuy said:

Here's an interview with the guy himself...

Britt Mayer on Instagram: "“I will cripple you.” —Harold Daggett, President of ILA Update: Strike officially began at midnight Tuesday 10/01 The strike, which would be the first at these ports since 1977, could stop the flow of a wide variety of go

17K likes, 1,695 comments - rooted.wings on September 30, 2024: "“I will cripple you.” —Harold Daggett, President of ILA Update: Strike officially began at midnight Tuesday 10/01 The strike, which would be the first at these ports since 1977, could stop the flow of a wide variety of goods over...

www.instagram.com

He makes it pretty evident in his little "I'll cripple ya...you have no idea" statement that, unlike other labor leaders, he seems to have little to no regard for other laborers or even other union laborers. He's bragging about how he's going to put retail workers, automotive workers, and construction workers on the unemployment line if he doesn't get what he wants.

Can you imagine Shawn Fain ever saying "Wait till you see those construction workers getting laid off when my men stop making/repairing trucks at the snap of my fingers, you'll see, I'll cripple ya!"?

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BCP1928 said:

Why is it unique? I've known the same thing to happen on the west coast, only with gunfire. (That's not unique, either)

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BCP1928 said:

What third party? I thought only the ILA and USMX were involved.

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BCP1928 said:

I never said anything about "fair." In any case, it looks like they didn't get the 77%. They would have known that going in, but you always start a negotiation by asking for it all.

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BCP1928 said:

The threat is implicit in all labor negotiations, whether it is voiced or not. That's one of the strengths of collective bargaining.

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ThatRobGuy said:

It's unique for a couple reasons.

1) Usually the "fight" is to get union members up to a level that allows for a decent living with decent benefits. This was a case where the guys already had that. A person making well over 6 figures, with 6 weeks of vacation, 16 paid holidays, good health plan, and nice 401k matching in addition to pension... is certainly "not fighting to get up to/stay in the middle class", they're already working under compensation conditions that are well above "middle class"

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ThatRobGuy said:

2) That's another way it's unique, there's actually two layers of separation between the employee and the company they're doing the work for.

Employee -> ILA <- -> USMX <- Shipping Company (like Kirby or APM Terminals)

3) Another way it's unique... many labor negotiations are based on perceptions/theories of "fairness" or "getting what's deserved/owed".

If that wasn't the context of these negotiations, and it was purely "I know you made X amount more last year, so we want most of X", then it really had nothing to do with the labor itself.

Not with such sweeping implications...

For instance, when UAW decides to strike, there are still non-UAW options out there.

This is more reminiscent of the railroad workers strike, which, strikes having such sweeping implications to the point where the POTUS/congress has to intervene are much more rare. This likely would've had to happen again had things not resolved.


The other way they're different (that I touched on before) is regards to their treatment of "casuals". While they're not the only union who uses that lingo and concept, they seem to be the only ones who do it in the exploitative way that they do. Where they're relying heavily on the labor of people who they have no intention of extending the full benefits of membership to (that are making a fraction of what they make -- they claim their $120k was "insulting", but have no problem letting a bunch of non-members do a lot of their work for $600/week when things get backed up)

The teamsters have the concept of "casuals", but they actually extend certain protections to them when filling that role and have it written into their bylaws that "casuals" have to be brought in as full members of the brotherhood after a certain number of at-bats.

For every 30 supplemental shifts worked in a two-month period, one full time Teamster must be created.

In a nutshell
Teamsters: "We want to make more teamsters out of non-teamsters to help with the workload and "share the love" if there's more work that needs done" (so to speak)
ILA: "We want to be able to leverage low-paid temp labor to help with our workload indefinitely, but we don't want to risk having a dent put in our deal, so let's keep keep them at the kids table indefinitely"

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BCP1928 said:

Good for them.

Just another case of blue collar workers not knowing their place, I guess. Tsk Tsk.

Yes, I'm teasing you just a little, And yes, these guys seem to want pay that (to outsiders like us) to be over the mark but a lot of your complaint seems to be about their place in the social hierarchy and what that place deserves in the form of pay.

Maybe I'm wrong about that, but that's why I wanted to move more into a discussion of general labor theory because if you think other, more humble unions only want to move their members into the middle class, you've got another think coming. Union men and women are not social climbers.

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ThatRobGuy said:

But the "hierarchy" as you described is the natural outgrowth of the concept of demand/scarcity.

For instance, it's not purely coincidence that in just about every developed society (apart from one attempting full-blown communism, and those don't seem to have a long shelf life), that doctors and scientists end up making a lot more than grocery store clerks. That's not merely because every society on the planet magically had some sort of grudge against people who stock soup on a shelf...or that Sweden colluded with Ireland to find out how much their stock clerks were making and tried to emulate it.

With very few exceptions, most of developed market economies (whether they lean right or left) have petty similar pay hierarchies for specific job sectors (the amounts may deviate a bit), but the order remains the same across career paths.

Actually, I would suggest that they're the ones who have a skewed perception of hierarchy. The fact that their leader openly stated that he's willing to "cripple" the automotive, retail, and construction industries to get what he wants for 'his crew' makes it sounds like he view his own union's vocation as "above theirs"...or at the very least, expendable.


For me personally, if there's an organization that wants to "stray from the formula" in ways that don't massively upend the supply chain and negatively impact tens of million of people, I actually don't care.

For instance, if there's some local grocery store that decides they want to pay their stock clerks and cashiers $120k/year with six weeks of paid vacation, and there's enough of a customer base that's willing to spend $600/week for their weekly grocery haul to support that mission...more power to them, enjoy. As long as there's options available for people don't want to (or can't afford to) pay $600/week for groceries, then there's really not a valid gripe against it.

As soon as you strong-arm that into place in the form of a sector-wide implementation via threats, that's when the rest of the marketplace gets to "care" about it.


People are perceptive enough to know which jobs actually involve a rare enough skill/ability set to warrant pay that lands one in the top 5% of earners.

And these ILA leaders know that too...they know it's a "sweet union gig" in terms of the pay received in comparison to the task being performed, and they know for a fact people would do it for less. Thus the reason they rely heavily on "casuals" to come in and knock out their backlog for $16/hour.

If the previous arrangements and compensation were so insulting or unfair or exploitative, you wouldn't see ILA longshoreman positions being passed down in such a nepotistic fashion over multiple generations like family heirlooms.

When a job is actually exploitative (in terms of compensation in exchange for task), parents do everything in their power to make sure their kids don't have to follow in their footsteps. In the case of Unionized Longshoreman, over half of longshoreman are "2nd & 3rd generation", and union memberships are "quasi-transferable" to family members via their sponsorship process and outsiders rarely get in. (and they're a top-down organization, they don't democratically elect leaders, they're appointed by Daggett, and he's already said that he's giving the president position to his son when he steps down)

You know who never says "I want to get my two sons and my nephew in here"?, an unfortunate dude in his 50's working at McDonalds. Nobody recommends a career that they feel is exploitative to their kids.

In the case of the ILA Longshoreman, people will do that job as a "casual" (in some cases for close to a decade per the earlier article I linked) for $16/hour in hopes that they can befriend a member enough to get them to give their sponsorship to them (instead of giving it to one of their family members) or in hopes to be able to get lucky on the lottery in which 2,000 "casuals" toss their name in the hat, and 10-15 actually get selected for full membership.

I don't buy that they think the previous arrangement was all that unfair...people wouldn't be reserving jobs for their kids and grandkids and/or waiting in line for 10 years in a lottery system for a job arrangement that sucks... people can get a sucky job anywhere.

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BCP1928 said:

Yes, they've got a lock on the job and they're profiteering. It happens all the time when an enterprise controls their market. Look at how the big five grocery suppliers did it during post-covid inflation; they controlled their markets and raised wholesale grocery prices faster than inflation and made a bundle. So the ILA is profiteering. You've been over it and over it. What's your point?

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ThatRobGuy said:

A) the point your bringing up is highly disputed.

https://www.npr.org/2024/09/09/nx-s1-5103935/grocery-prices-inflation-corporate-greedflation

Companies' financial disclosures cover global operations, meaning lots of variety in costs and prices. But for almost all companies that NPR analyzed, between 2018 and 2023 the margins either declined or grew less than 1%.

Several government data sources offer similar takeaways. Take the Census Bureau's report on corporations, which tracks total sales and most operating costs. At food manufacturers, it shows profit margins climbing and falling dramatically during the pandemic before settling near pre-pandemic levels at the start of this year.

Supermarkets, liquor stores and convenience stores are much less profitable businesses overall. Their profit margins climbed more gradually in recent years but got sticky at the top, meaning companies kept a slightly bigger share of the money from sales as time went on, and they've been slower to give up those gains.

Yet that's not quite the smoking gun to explain grocery inflation, according to New York Federal Reserve researcher Thomas Klitgaard.

"Even though profit margins for grocery providers have gone up," he wrote in a July report, "the increase appears to be only a small contributor to the rise in food prices relative to the increase in their operating costs."

https://finance.yahoo.com/news/evidence-of-food-price-gouging-is-hard-to-find-181613112.html

In a nutshell, blaming "grocery greed-flation" was largely a CYA move by entities who wanted to justify their supporting of some of the covid measures that lead to supply chain strains, and deflect and put blame on corporate entities because they want to still pretend that the externalities of their policies were less than what they actually were.



B) Even in cases of legitimate corporate supply-side profiteering (which I would say that big banks, the pharmaceutical companies, and factory farming industries are much more guilty of...take a look at what Tyson does to local farmers or what happens in the egg industry), people will still call it for what it is, pure greed that people see as a form of evil. Yet, when it's the labor side doing it, they have to pretend that it's somehow "not quite as bad".


If a Pharmaceutical company responsible for providing flu shots said "we're stopping all operations today until further notice unless we get the $2.2 billion dollars we want, we realize that we already make a lot of money, but we looked at your budget, you have $2 Billion you can spare...give it to us, or people won't get their flu shots", it would be seen as a unique form of evil.

Yet, because it's an organized labor entity making the same demand "Give us $2.2 billion dollars (I showed the math earlier...25,000 people each getting a 77% raise on top of an existing six figure salary equates to over $2 billion), else we'll cripple your supply chain in ways that put countless other people out of work and raise prices a variety of things that'll hurt other workers", we have to pretend that it's somehow "less awful" because the people orchestrating it wear jeans and a ballcap instead of an Armani suit.

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BCP1928 said:

Wow, you really are bitter. But whoever is forcing you to pretend that it's OK obviously isn't doing a very effective.job. And the ILA still doesn't have as good a contract as the ILWU. The automation part of it still hasn't been worked out, though, so we'll see. Harry Bridges, founder of the ILWU once said, "Even if it comes down to one person pushing one button to run a whole port that person will be union, and the richest SOB in the world..”

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