East Coast Port Strike Looms Once Again

Dec 20, 2012

Photo: Tim Rue/Bloomberg

This is cross-posted from the Workforce Freedom Initiative's blog

With the holidays upon us, most Americans are rightly preparing to spend time with their families and friends, but good cheer does not seem to be the dominant theme in contract talks that broke down yesterday, which may lead to a damaging strike along the east coast’s ports.  As this blog reported earlier in the fall, the United States Maritime Alliance (USMX), which represents shipping companies and port operators from Maine to Texas, and the International Longshoremen’s Association (ILA) representing longshore and other port employees at the ports, have been engaged in a prolonged contract dispute. 

With discussions between the two sides seemingly going nowhere since March, even with a mediator from the Federal Mediation and Conciliation Service (FMCS) involved, the two sides agreed back in September to extend the contract deadline from the end of that month until December 29.  The delay averted a crippling strike that might have forced an intervention by the White House right before the November elections, but in the weeks since then both parties still have not reached an agreement. 

Worries have mounted this month that the USMX and ILA talks would break down, especially after a December 10 meeting at which ILA Wage Scale delegates rejected a proposal from USMX and then voted to authorize a strike.  As of yesterday, it seems even more likely that the union would walk its 14,5000 members out after the FMCS mediator involved in the negotiations recommended another contract extension past December 29 for further discussions with everything still on the table, which the ILA refused to accept. 

What seems to be at issue at this stage is not the outlandish “low-show” job that was the subject of previous debates a few months ago, but rather the bonus payments that dock workers receive per cargo container, known as cargo royalties.  These payments go to longshoremen in addition to their regular salaries, which, taken together, the USMX says would average $55/hour (approximately $100,000 per year plus $15,000 in royalties) under the terms of its latest offer, not including $20,000 in benefits. 

Company officials want to protect royalty payments to current workers for the next 25 years but not offer them to new hires going forward.  Rather than allow these bonuses to be subject to further negotiations, the union said the payments are“untouchable” while simultaneously and cynically accusing the USMX of being the one causing the impasse.  Given the intractable nature of the union’s position, talks finally came to a halt yesterday. 

Since 1977, the USMX and ILA have managed to negotiate contracts and avoid strikes, so perhaps they will reach some agreement before one ensues this time.  If the union does walk out, however, tens of thousands of other jobs would be affected, and the economic costs would mount rapidly for retailers and others whose goods would not make it to market.  As happened in 2002, pressure on the White House to invoke the Taft-Hartley Act to end the strike would grow as well, a move that would infuriate the labor movement.  With talks at a standstill and the deadline just past Christmas, it looks like the American economy might be getting a lump of coal in its stocking. 

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