First Port Worker Strike in 44 Years: Economic Consequences
From product shortages to price pressures, economic observers are assessing the implications of the port strike.
Thousands of Atlantic and Gulf Coast port workers initiated a strike at 12:01 a.m. on Oct. 1, marking the first strike since 1977 and potentially causing significant harm to the U.S. economy.
The International Longshoremen’s Association (ILA), the largest union of dock and maritime workers in North America with 85,000 members, rejected a proposal by the U.S. Maritime Alliance (USMX), a coalition of container carriers, direct employers, and port associations.
“We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve,” said Harold Daggett, the ILA president.
Before the strike, USMX officials had offered a nearly 50 percent wage increase, improved health care and retirement benefits, and enhanced automation and semi-automation protections over a proposed six-year contract.
Work stoppages disrupting billions of dollars in daily trade flows have raised concerns about product shortages and inflationary pressures.
When asked if he was concerned about harming everyday Americans, Daggett mentioned that the public had never paid attention to port workers until now when they realized the chain was being broken.
“You know how many people depend on our jobs? Half the world,” he said.
Economic Implications of the Port Strike
According to an analysis by economists at The Conference Board released on Sept. 27, a one-week strike could cost the U.S. economy $3.78 billion, equivalent to $540 million per day.
The East and Gulf Coast ports handle roughly half of all U.S. container volume and manage about one-quarter of the $3 trillion annual international trade of the United States.
Illustration by The Epoch Times, Shutterstock
“A port strike would paralyze U.S. trade and raise prices at a time when consumers and businesses are beginning to experience relief from inflation,” said Erin McLaughlin, a senior economist at The Conference Board.
Eric Clark, portfolio manager at Accuvest Global Advisors, noted that a prolonged strike by tens of thousands of workers could have a severely negative impact on the U.S. economy.
He estimated that any disruption lasting more than one week could lead to goods shortages during the holiday season, resulting in lost sales for retailers unable to raise prices without products.
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