Lewis Morris / October 21, 2021

Blame Unions for Supply Issues

Partially, at least, labor unions have gummed up the works and hampered deliveries.

The supply chain problem we highlighted recently is still very much with us, and we have the unions to thank for it.

As might be expected, nothing came of President Joe Biden’s involvement in the issue, and Transportation Secretary Pete Buttigieg has been busy on paternity leave. Not long ago, Biden triumphantly announced a deal to open the Los Angeles and Long Beach ports 24/7. America’s two busiest ports are currently the primary culprits for the import bottleneck that’s throttling the economy. The press lauded Biden’s announcement, but it never really happened. Long Beach is operating temporarily 24 hours a day Monday through Thursday, but that’s it. The Port of Los Angeles still operates under the daylight hours it’s always enjoyed, and neither port has any plans to permanently go 24/7.

If you guessed that the reason these ports won’t operate around the clock is because of labor unions, you would be right. Dockworkers and foreman at these facilities are paid quite well, but the Port of Long Beach is considered the least efficient port in the industry when it comes to offloading ships. That’s because they don’t exactly work around the clock. According to waterfront labor negotiator Jim Tessier: “Most shipping companies are foreign and did not attend Biden’s briefing and don’t care about what he or the landlord think. The port has nothing to do with all the operations — they are the landlord. How involved is your landlord in your business?”

Thus, even after Biden “came to the rescue,” LA ports were reportedly ghost towns just this last weekend, all while a record number of ships are anchored offshore waiting to be unloaded.

Meanwhile, the International Longshore and Warehouse Union, which represents Long Beach dockworkers, already owes $19 million in damages for engaging in illegal labor practices like work stoppages and slowdowns and other coercive actions. The original punitive damages were calculated at $94 million, but the courts took mercy on the nearly bankrupt union.

It’s not just at the ports where the heavy hand of labor unions is impacting supply issues. A wave of strikes has broken out across the manufacturing sector, with the prime grievance being insufficient wage increases to combat the impact of inflation, which has risen 5.4% in the past year. (Thanks, Joe Biden.) The biggest strike so far involves more than 10,000 employees of John Deere, and employees have walked off the job at Kellogg and Frito-Lay. Other strikes have affected workers in Washington State and California.

Labor is clearly flexing its muscles, using problems with the supply chain, labor shortages, and inflation to push for greater wage and benefit gains than the unions might otherwise earn. Though it seems predatory, this is part of the natural order. Strikes are rarely effective unless management stands to lose if they continue the current course. It’s different this time, though, because labor stands to lose more, though they don’t seem to realize it. Inflation is battering the economy, and the significant slowdowns in the supply chain aren’t helping matters. Labor shortages compounded with strikes will further slow the economy, and companies will start going under. The strikes will be for nothing if the workers get their big raises and their companies fold the following year.

Like any chain, the supply chain is only as effective as its weakest link. In this case, that weak link is the labor unions. And the more of them that go on strike, or continue to stubbornly stick with old rules, the longer our supply chain will continue to suffer.

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