October 1, 2024

The Economic and Electoral Effects of the Longshoremen Strike

Supply chain disruption could cause shortages and price increases just before the election.

Supply chain disruptions were a major factor in igniting inflation in 2021 and 2022, as producers and transporters struggled to keep up amidst a global pandemic. Government spending sent too much money chasing after too few goods, causing prices to skyrocket — a cumulative 20% and more like 50% on many things since Joe Biden and Kamala Harris took office.

What will happen now that tens of thousands of members of the International Longshoremen’s Association (ILA) walked off the job today? From Maine to Texas, port workers are now on strike after contract talks deadlocked with the U.S. Maritime Alliance (USMX). The strike will have a huge impact on the supply chain.

Roughly half of U.S. imports come through these ports — everything from bananas and chocolate to clothing and machinery. Exports are also substantial, including poultry, pork, and beef, as well as cars and pharmaceuticals. J.P. Morgan estimates the economic impact will be between $3.8 billion and $4.5 billion every day.

On top of that, huge swaths of Florida, Georgia, Tennessee, South Carolina, and maybe especially North Carolina were just hit by the disaster of Hurricane Helene. Whole towns in western North Carolina are gone. At least 120 are dead, and millions need supplies.

What message does ILA chief Harold Daggett have?

“I will cripple you.”

Here’s the larger context:

When my men hit the streets from Maine to Texas, every single port will lock down. You know what’s going to happen? I’ll tell you. First week, it’ll be all over the news. Every night. Boom, boom. Second week, guys who sell cars can’t sell cars because the cars ain’t coming off the ship. They get laid off. Third week, malls start closing down. They can’t get the goods from China. They can’t sell clothes. Everything in the United States comes on a ship. They go out of business. Construction workers get laid off because the materials aren’t coming in. The steel is not coming in. The lumber’s not coming in. They lose their jobs. Then everybody’s hating the longshoremen because now they realize how important our jobs are.

He concluded by threatening that workers would barely do any work if forced back onto the job. “Who’s going to win here?” he asked. “Let’s get a contract and let’s move on with this world. Because in today’s world, I will cripple you. I will cripple you. And you have no idea what that means. Nobody does.”

What are the union’s demands?

According to The Wall Street Journal, “Port employers, pressed by Biden administration officials to resolve the impasse, raised their offer on wages to a 50% increase over six years, from an earlier 40% increase, along with other improvements in benefits in the 24 hours before the strike deadline. The ILA is seeking a 77% wage increase over six years as a condition to sit down to talks with maritime employers, according to a person familiar with the negotiations.”

A 50% wage increase is an astonishingly brazen demand. As I already mentioned, inflation has hit a cumulative 50% on many items and services since 2021, but virtually no other workers in the nation are getting wage increases that keep up with — much less surpass — cumulative inflation.

It’s the first ILA strike since 1977. Come to think of it, in 1977, the president was Jimmy Carter, who turns 100 today. His closest protégé, Joe Biden, who acts like he’s 100, is ostensibly still president for this strike. What a strange coincidence.

George W. Bush intervened in 2002 to shorten a West Coast strike, but Biden says he will not invoke the Taft-Hartley Act to order workers back on the job for another 80 days while negotiations continue. Just last year, Biden became the first president to show up on a picket line. He isn’t going to cross a union a month before the election.

The calculation for Kamala Harris and Tim Walz is this: If the strike is short, they will claim credit for the resolution. If, however, it ends up being a prolonged strike and the disruptions and price increases grow, they’ll seek to shift the blame somewhere else. Somehow, they’ll discover that this was all Donald Trump’s fault.

Will consumers buy it?

Follow Nate Jackson on X/Twitter.

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