To Avoid Strike, Both Sides Should Commit to Reaching AgreementDecember 21, 2012
International Longshoremen’s Association Wage Scale delegates recently voted to authorize a strike when the current extension of the Master Contract expires at midnight Dec. 29.* The potential consequences of that decision could have serious consequences for the nation’s economy as well as for ILA members themselves, making it more important than ever that both sides work to reach an agreement and avert any disruption at the ports.
A strike or work stoppage at the East and Gulf Coast ports would have a devastating impact on the U.S. economy, disrupting the flow of international trade and commerce in and out of the 14 ports from Maine to Texas.
A shutdown would wreak havoc on manufacturers, retailers, farmers and others who depend on the ports to move their supplies and products. They include large America’s retailers like Wal-Mart, Target and Home Depot that rank among the country’s top importers as well top exporters like Weyerhaeuser, DuPont and Cargill.
Not only would any disruption have serious consequences for the nation’s still-recovering economy, but it would also jeopardize the financial well-being of the ILA’s 14,500 members, who would lose nearly $5 million in wages and benefits for each day they’re out of work or a total of $150 million in lost compensation in just a month.
- At the Port of New York and New Jersey, which employs more ILA members than any of the 13 other East and Gulf Coast ports, the union’s 3,250 members would lose $7.5 million a week in wages alone.
A strike at the port, the largest on the East Coast, could also put at risk the nearly 171,000 jobs directly related to New York and New Jersey port operations.
- At Hampton Roads in Virginia, a one-month shutdown would cost ILA workers more than $10 million in lost wages and benefits.
At the Savannah and Brunswick ports in Georgia, a shutdown of union operations would result in an estimated $2.3 million a week in lost wages and benefits for ILA members.
Any shutdown would also have dire consequences for the more than half a million other workers who depend directly on port operations for their livelihood.
- In New York and New Jersey, for example, a shutdown would result in $100 million in lost revenue a month for railroads, truckers and other port-related transportation industries that handle the more than 250,000 containers that move through the port each month.
- A one-month shutdown of the BMW assembly plant in South Carolina and the Mercedes Benz plant in Alabama could result in the temporary furlough of 6,900 workers at the two plants and potentially affect more than 34,000 workers across the country. It would also result in the loss of $52 million in federal, state and local tax revenues over a month.
While the overall impact of any East and Gulf Coast shutdown is yet to be determined, the 10-day lockout at West Coast ports in 2002 cost the U.S. economy an estimated $1 billion a day and resulted in a loss of cargo volume from which the West Coast ports have still not recovered a decade later. More recently, an eight-day strike at the Ports of Los Angeles and Long Beach in November reportedly caused a 2 percent drop in the volume of containers compared with the same month in 2011. Similarly, a work stoppage at ports on the East and Gulf Coast would cause shippers to divert cargo to Canada, Mexico and the West Coast.
In a letter Dec. 17 to President Obama, Matthew Shay, the president and CEO of the National Retail Federation, summed up the situation by saying that “a strike of any kind at ports along the East and Gulf Coast could prove devastating for the U.S. economy…”
*Both sides have since agreed to extend the Master Contract until February 6.