The American economy indicates an abiding concern over a major strike this week which could disrupt supply chains shortly before the November election.
For context, the International Longshoremen’s Association is indicating that its tens of thousands of members would be going on strike if they do not finalize a labor agreement with ownership by Oct. 1. The group has been trying to negotiate a new agreement with the US Maritime Alliance as their current one expires after Sept. 30.
Information regarding these labor discussions is difficult to specify, but the general points of contention seem to be focused on job benefits and security. The ILA is seeking higher wages, better health care benefits and protections against automated processes that could threaten the livelihoods of employees.
This labor contract is a big deal since it covers over a dozen ports along the East and Gulf coasts. John McCown of the Center for Maritime Strategy said the five largest ports along this stretch brought in a combined value of around $2.7 billion in cargo for August alone.
Any disruption to that chain would cause massive backlogs around the world and generate more inflationary prices. Despite these threats, it seems like the two negotiating groups cannot come to a consensus and have frozen any talks on the matter.
This freeze led some to believe that President Joe Biden would intercede as he did with a rail strike in 2022. Trade and consumer groups had essentially begged the White House to guarantee that there would be no disruption of port operations despite the soured negotiations.
But the White House decided not to intervene in these labor affairs, which Moody’s Analytics economist Adam Kamins said “rose the level of alarm” for the situation.
Republicans have since come out of the woodwork to demand that the Biden-Harris administration step in and do something to prevent the strike. The Labor Department has since offered help to the Maritime Alliance in finalizing a deal.
According to Consumer Brands Association vice-president Tom Madrecki, nobody wants the strike to go forward. But Madrecki warns that everyone has “to be prepared” for a strike that would “have a really serious impact on the economy.”
Jim Cameron, a columnist writing for the CT Mirror, says that even a one-day strike “would take five days to recover from.”