Port workers on the U.S. East Coast are set to strike on October 1st, potentially paralyzing ports from New York to Houston, along the East Coast and Gulf of Mexico. This strike will not affect the West Coast as the workers belong to different unions, although West Coast workers might refuse to process redirected cargo in solidarity.
The East Coast union has announced that military cargo and cruise ships will continue to be handled during the strike to avoid affecting vacations. Oil and gas, transported via specialized facilities, will not be affected, so gasoline and fuel prices are expected to remain stable. The last strike by these workers occurred in 1977 and lasted 45 days, but globalization has significantly increased its potential impact since then.
The primary reason for the strike is the failure to reach a collective agreement between labor and management. The previous contract, negotiated in 2018, expires on September 30th. Without a new agreement, workers will strike. The International Longshoremen’s Association (ILA, Financial), representing 47,000 members, has been negotiating a new wage contract since this summer without success.
Under the previous contract, the base wage was $38 per hour (excluding new employees). While specific demands for the new contract have not been disclosed, the union seeks wage increases and limits on automation impacts due to rising costs and increased shipping industry profits post-pandemic. Management perceives these demands as excessive, leading to a stalemate.
The strike could have significant global impacts. In our globalized era, maritime transport is a main artery of globalization, with ports as critical nodes. A port shutdown could clog this artery, causing substantial economic disruption. Reports suggest that each day of the strike could result in $1 billion in direct economic losses.
The strike might also influence the upcoming U.S. elections. With just over a month until voting, candidates' stances on the strike could affect voters' perceptions. President Biden, known for his pro-union stance, and Vice President Harris, who has supported strikes in the past, face a dilemma. Support might alienate capitalists and conservatives, while lack of support could lose worker and union backing. Prolonged strikes affecting the economy could also provide ammunition for their critics.
For Trump, this strike is equally challenging. Many of his supporters come from the working class, for whom port jobs are valuable. However, his right-wing ideology opposes strikes. Balancing opposition to the strike with maintaining worker support will require careful positioning.
The strike could significantly impact China, as this year's economic growth heavily relies on export recovery despite declining U.S. exports. From January to August, China's exports to the U.S. totaled $334.15 billion, accounting for 14.4% of its total exports. Prolonged strikes will likely affect external trade businesses.
Strikes have been on the rise in the U.S. over the past two years, reversing a decades-long decline. Since the 1980s, American labor movements have diminished in frequency and impact but have recently resurged. According to Cornell University, 1,667 strikes or worker protests have occurred in 2023 alone. Last year's significant victory by the United Auto Workers (UAW) against major automakers boosted the labor movement. A successful port worker strike could further empower unions as they strive for better wages and conditions.
