Dockworkers strike over pay and automation policies

The roughly 45,000-member International Longshoremen’s Association went on strike at midnight Tuesday morning, after negotiations with employers failed to produce an agreement with the U.S. Maritime Alliance, the organization that represents the ports. The strike impacts 36 major ports from Texas to Maine and is the first major strike by the dockworkers’ union since 1977. The striking workers have been seeking a 77% pay increase over the next six years. The ILA also wants stronger language in the workers’ new contract that would protect their jobs from automation. The alliance, meanwhile, countered with a 50% pay increase over the six-year period and maintaining existing anti-automation language, an offer that was rejected by the ILA, per AP News.

Economic impact expected to grow quickly

The strike is expected to have a significant effect on the American and global economies, with its impact growing the longer it lasts. Industries such as automobiles and pharmaceuticals could be hit hard from even a short strike, and consumers may see higher prices and shortages of goods grow if the strike endures. Peter Sand, chief analyst at ocean freight rate intelligence platform Xeneta, said “the stakes could not be higher” because 40% of “containerized goods” enter the U.S. by way of East and Gulf Coast ports, per CNBC. The strike is expected to exacerbate a set of supply chain disruptions that have been caused by a set of global events, including conflict in the Middle East disrupting Red Sea shipping traffic, a drought impacting the Panama Canal, and the collapse of the Francis Scott Key Bridge in Baltimore in March.

Political impact remains to be seen

Beyond the economic impact of the strike, a prolonged impasse could have significant political implications. President Joe Biden, who has presented himself as the most pro-labor president in U.S. history, took a hit to his pro-union credentials two years ago when he used presidential authority to end a rail strike; the president has stated he will not use his authority to end the current dock strike. Meanwhile, a continuing dock work stoppage will impact the campaigns of both Vice President Kamala Harris and former President Donald Trump, who have been competing for the support of organized labor and presenting competing plans for lowering consumer prices and bolstering the economy.

As Americans approach the holiday season and the presidential candidates head into the final weeks of their campaigns, the current dockworkers’ strike could make things complicated for everyone involved. The coming days and weeks will show if this ends up being a short-term interruption or a more protracted and costly dispute.