Economy, Regs, & Taxes

Workers Unions Strike Again

The International Longshore and Warehouse Union extracts concessions.

Feb. 24, 2015

A couple of notable strikes are hurting private businesses and their employees, as well as impacting the price of food, goods and fuel nationwide. The International Longshore and Warehouse Union (ILWU) arguably hasn’t been on strike so much as it merely slowed and stalled cargo loads for months now, but a tentative agreement has been reached. For now, ports will resume full operations.

Several California industries suffered from the ILWU’s slowdown. Two such industries are Honda and the North American Meat Institute – the former due to a shortage of parts and the latter due to meat sitting in freezers instead of being shipped to retailers.

Though the work slowdown, conducted by dockworkers at 29 different West Coast ports, didn’t exactly bring the economy to a grinding halt, it’s impact was felt nationwide. It hurt workers whose jobs depend upon imports and exports that have to make it through the dockworkers. In other words, the workers who are not part of the union suffered because of the union – which was probably part of the point.

Unions came about to bargain for competitive wages, and there’s nothing wrong with that in principle. In fact, unions did much good to improve working conditions throughout the 20th century. In some cases, that’s still true. But this particular dispute was a bit extravagant. Why? According to the manager of ports for the Pacific Maritime Association, “[A]n average full-time worker makes $147,000 a year, with very generous benefits on top of that.” That said, “[T]he ILWU says longshoremen aren’t always able to work as many hours as they’d like, putting a typical income at $83,000.”

Walking off a job this good probably sounds insane to the average American worker who earns far less than this, but remember: These longshoremen work in California. While it may sound like they’re getting rich, in reality, the cost of living and excessive taxation in the Golden State mean they’re merely earning a good middle-class income. Dock work is very labor intensive, and these blue-collar workers should be paid well.

But the workers were offered a pay raise of 14% over five years, which averages about 3% per year. What American in the Obama economy wouldn’t jump at that offer? Unfortunately for the longshoremen who would take it, the union wanted more. (Details of the tentative agreement have yet to be released.)

In related news, some workers in oil refineries are on strike. According to CBS News, the United Steel Workers (USW) union announced Saturday “that workers at the largest refinery in the U.S., the Motiva Enterprise refinery in Port Arthur, Texas, started their strike at midnight on Friday.” And “employees at two other refineries and a chemical plant in Louisiana started their strike at the end of Saturday.”

Naturally, whenever refineries shut down or lose productivity due to strikes, gas prices rise, specifically in those states that rely on those refineries for fuel. The American consumer ends up paying for it, which doesn’t bode well for many Americans who are still struggling to make ends meet. Just when we were enjoying low gas prices…

The main problem is unions have become far too political, complacent and corrupt. Their often lavish demands and actions affect the larger economy, negatively impacting private industries and, in turn, Americans’ wallets. Americans don’t want to – and often can’t – pay more for gas, food, retail and other services. But, when unions have so much power and influence over the market, what can we expect?

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